C E RT I F I E D P U B L I C A C C O U N TA N T S CITY OF GOODYEAR, ARIZONA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2011 CITY OF GOODYEAR, ARIZONA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2011 Prepared by the Finance Department Larry A. Lange, Finance Director TABLE OF CONTENTS I. INTRODUCTORY SECTION Letter of Transmittal GFOA Certificate of Achievement City of Goodyear Officials Organizational Chart Acknowledgements Page vii xii xiii xiv xv II. FINANCIAL SECTION Independent Auditors’ Report 1 A. Management’s Discussion & Analysis 5 B. Basic Financial Statements 17 Government-wide Financial Statements Statement of Net Assets Statement of Activities 19 20 Fund Financial Statements Governmental Fund Financial Statements Balance Sheet Reconciliation of the Balance Sheet to the Statement of Net Assets Statement of Revenues, Expenditures and Changes in Fund Balances Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities Budgetary Comparison Statements – General Fund 24 27 28 31 32 Proprietary Fund Financial Statements Statement of Net Assets Statement of Revenues, Expenses and Changes in Fund Net Assets Statement of Cash Flows 37 38 39 Fiduciary Fund Financial Statements Statement of Fiduciary Net Assets Statement of Changes in Fiduciary Net Assets 43 44 Notes to Financial Statements 1. 2. 3. 4. 5. 6. 7. 8. Summary of Significant Accounting Policies Cash and Investments Receivables Capital Assets Loans Payable Contract Payable General Obligation Bonds Payable Revenue Bonds Payable 49 56 60 61 62 63 63 65 i Notes to Financial Statements (continued) 9. 10 11. 12. 13. 14. 15. 16. 17. 18. Community Facilities Districts Bonds Payable Amortization of Bond Costs Changes in Long-term Liabilities Interfund Receivables, Payables, and Transfers Contingent Liabilities Risk Management Retirement Plans Deficit Fund Balance Commitments Subsequent Event Page 66 68 69 69 70 70 71 75 76 76 C. Other Supplementary Information- Combining Fund Financial Statements Non-Major Governmental Funds Combining Balance Sheet Combining Statement of Revenues, Expenses and Changes in Fund Net Assets 80 82 Fiduciary Funds Combining Statement of Fiduciary Net Assets-Agency Funds Combining Statement of Changes in Assets and Liabilities-Agency Funds 87 88 D. Other Supplementary Information Budgetary Comparison Schedules - Other Major Governmental Funds Community Facilities Districts - Debt Service McDowell Road Commercial Corridor Improvement District - Debt Service Non-Utility Development Impact Fees 91 92 93 Budgetary Comparison Schedules - Non-Major Governmental Funds Highway User Revenue Fund Grants Community Facilities Districts – General Capital Improvement Projects McDowell Road Commercial Corridor Improvement District Capital Projects Debt Service Water & Sewer Enterprise Fund Sanitation Enterprise Fund Stadium Enterprise Fund 97 98 99 100 101 102 103 104 105 Combining Financial Statements – Internal Service Funds Combining Statement of Net Assets Combining Statement of Revenues, Expenses and Changes in Fund Net Assets Combining Statement of Cash Flows 109 110 111 Capital Assets Used in the Operation of Governmental Activities Schedule by Source Schedule by Function and Activity Schedule of Changes by Function and Activity 115 116 118 ii III. STATISTICAL SECTION Table Net Assets by Component Changes in Net Assets Governmental Activities Tax Revenues by Source Sale & Use Taxes Fund Balances of Governmental Funds Changes in Fund Balances of Governmental Funds Governmental Activities Tax Revenues by Source Property Tax Rates Principal Property Tax Payers Assessed Value and Estimated Actual Value of Taxable Property Property Tax Levies and Collections Utility Statistical Data Ten Largest Water Users Utility Statistical Data Ten Largest Wastewater Users Schedule of Existing and Adopted Monthly Water & Sewer Service Charges Ratios of Outstanding Debt by Type Ratios of General Bonded Debt Outstanding Direct and Overlapping Governmental Activities Debt Legal Debt Margin Information Pledged Revenue Coverage Demographic and Economic Statistics Principle Employers Full-time Equivalent City Government Employees by Function Operating Indicators by Function Capital Asset Statistics by Function Page 1 2 3 4 5 6 7 8 9 10 11 12 13 122 124 131 132 134 136 141 142 147 148 150 151 153 14 15 16 17 18 19 20 21 22 23 24 154 156 158 159 160 161 162 163 165 166 168 IV. SINGLE AUDIT SECTION Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 171 Independent Auditors’ Report on Compliance with Requirements that could have a Direct and Material Effect on each Major Program and Internal Control Over Compliance in Accordance with OMB Circular A-133 173 Schedule of Expenditures of Federal Awards 176 Notes to the Schedule of Expenditures of Federal Awards 178 Schedule of Findings and Questioned Costs 179 iii iv Introductory Section v vi PROFILE OF THE GOVERNMENT The City of Goodyear, incorporated in 1946, and chartered in 1988, started as a small town producing cotton for the production of rubber tires during World War I. Over the years Goodyear has sustained continued growth and currently encompasses approximately 191 square miles in the western portion of Maricopa County, and is approximately 17 miles west of the downtown Phoenix business district. The City's growth is attributable to excellent housing, a small-town atmosphere, convenient access to the central Valley, and excellent school districts. The population as of the 2010 census was 65,275, with current estimates as of fiscal year ended June 30, 2011, projected to be 66,564. Goodyear has a Council/Manager form of government consisting of the Mayor and six Council Members. The Mayor and Council members are elected at-large to four-year terms. The City Council is vested with policy and legislative authority and is responsible for passing ordinances, adopting the budget, appointing committee, commission, and board members, and appointing the positions of City Manager, City Attorney, and Judge. The City Manager is responsible for carrying out the policies and ordinances of the City Council, as well as overseeing the day-to-day operations of the City. The City provides a full range of municipal services, including police and fire protection, sanitation services, water and sewer services, construction and maintenance of streets, recreational programs, parks, and cultural events, public transportation, planning and zoning services, and general administrative services. Goodyear offers a wide range of community facilities including a community center, a swimming pool, and seventeen parks, encompassing 204 acres. The City is community driven and includes over 500 volunteers that serve in various areas, and through their efforts, have saved the City over $420,000 in fiscal year 2011 alone. In addition, Goodyear continues to attract major employers with its availability of land, access to the central Valley and available commercial space. FINANCIAL CONTROLS Internal Controls The management of the City of Goodyear is responsible for establishing and maintaining a system of internal controls. Internal accounting controls are designed to provide reasonable, but not absolute, assurance regarding: 1) the safeguarding of assets against loss from unauthorized use or disposition, and 2) the reliability of financial records for preparing financial statements and maintaining accountability for assets. The concept of reasonable assurance recognizes: 1) the cost of a control should not exceed the benefits likely to be derived, and 2) the valuation of costs and benefits requires estimates and judgments by management. The system of internal control is subject to periodic evaluation by management and is also considered by the independent auditors in connection with the annual audit of the City's financial statements. All internal control evaluations occur within the above framework. The City's internal accounting controls are considered to adequately safeguard assets and provide reasonable assurance of proper recording of financial transactions. viii Budgetary Controls The City of Goodyear, like all cities in the State of Arizona, is subject to numerous budget and related legal requirements. Article IX, Section 20 (1) of the Arizona Constitution sets limits on the City's legal budget capacity. At a general election held in March 11, 2003 the citizens of Goodyear approved a permanent adjustment of the 1979 expenditure base for population and inflation growth. The City may utilize the additional expenditure authority for any local budgetary purposes. The permanent adjustment eliminates the need for voter approval every four years. The City maintains budgetary controls to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the Mayor and Council. Activities of the general fund, special revenue funds, debt service funds, capital project funds, enterprise funds and internal service fund are included in the annual appropriated budget. The legal level of budgetary control (i.e., the level at which expenditures cannot legally exceed the appropriated amount) is the total budget, as adopted by the City Council. The City additionally exercises management control and oversight of the budget at the department level within each fund. In addition to maintaining budgetary control via a formal appropriation, the City maintains an encumbrance accounting system. Encumbrances are made against appropriations upon the issuance of a purchase order. Encumbered appropriations lapse at fiscal year-end and are re-encumbered as needed in the next fiscal year. LOCAL ECONOMIC CONDITION AND OUTLOOK Although current economic conditions continue to impact the country and Goodyear specifically, current unemployment data shows a positive trend in the unemployment rate, as well as an increase in sales tax revenues. As optimistic as the City is in this trend continuing, the City continues to monitor the changes taking place in the national and local economies, as adaptation is imperative to keeping the budget balanced and positioning the City for future growth. The City has implemented alternative services, enacted cost saving adjustments, reorganized where cost savings would be produced, and renegotiated contracts. These cost saving measures will continue into the future until such time economic conditions improve. While the City of Goodyear continues to face challenging economic times, FY 2012 focuses on preserving the community’s outstanding quality of life by incorporating a number of projects and initiatives that range from recreation to public safety and an overall goal of fiscal solvency with the flexibility to change as economic and services demand. Goodyear continues to attract large business. Suntech, the world’s largest producer of solar panels, celebrated its grand opening of the first U.S. based manufacturing plant in Goodyear on October 8, 2010. In addition, Sub-Zero, Inc., manufacturer of high-end refrigeration, freezer and wine-storage have also made their presence known by expanding its facilities in Goodyear during FY 2011, bringing nearly 400 jobs to the City. A key City Council goal continues to focus on bringing jobs into the city and to make Goodyear one of the largest employment bases in the West Valley. There are three major corridors that are forming that will have a great influence on the future of the city: Airport Gateway Center – 1,200 acres of mixed development, Palm Valley 303 – 2,000 acre master planned business park, and the 801/85 Employment Center – 1,700 acre employment corridor for manufacturing and industrial business. ix Economic Outlook The economic slowdown at the national level has had a direct impact at the state and local level economy. The recovery is slowly beginning. General fund revenue projections are projected to increase by 7% during FY 2012. This increase is mainly due to an increase in State Shared Revenues. Although this adds to the City’s revenue growth, the City still continues to be conservative in its estimates. Sales Tax - The City of Goodyear, like all Arizona cities, places significant reliance on City sales tax revenues. Overall, City sales tax revenues for FY 2012 are expected to equal 54% of General Fund revenues. City sales tax revenues for FY 2011 increased by approximately 4.1% over FY 2010 levels. State Shared Revenue - The City of Goodyear receives revenue allocations from the State. These “State Shared Revenues” include allocations of the state-collected income tax, sales tax, gas tax, motor vehicle in-lieu taxes, and state lottery proceeds. A significant portion of this revenue is placed in the City’s General Fund, where it is used to support the City’s day-to-day activities. The amount received by a municipality is determined by the Decennial Census and its relationship to Arizona’s population as a whole. Due to the Decennial Census data, the City anticipates a 32.17% increase in state shared revenues in FY 2012. Property Tax - The City's combined (secondary and primary) property tax rate was $1.42 per $100 of assessed valuation for FY 2011 due to a one year lowering of the rate by the City Council. Of this, $0.66 is for the secondary levy. The secondary levy can only be used for voter approved debt service on general obligation bonded indebtedness. The voter approved general obligation bond proceeds are used for construction of public facilities (parks, public safety, streets, etc.). For FY 2012, City Council voted to reestablish the total combined property tax rate to $1.60 per $100 of assessed value. The primary property tax rate is $.76 for FY 2011. The primary levy can be used for any general government purpose (such as supplies, personnel, maintenance, utilities, etc.) but is limited in size by State statute. The primary tax raised $6.0 million in FY 2011. The primary tax rate will be $.94 for FY2012. The primary property tax revenues are expected to be $6.3 million dollars in FY 2012. While this amount is approximately 10.2% of the operating revenues, it is nonetheless an important component for the stability and revenue diversity of the City's operating revenues. Total primary (limited) assessed property value within the City has decreased by approximately 15% from FY 2011. The secondary assessed valuation decreased by approximately 21% from FY 2011. Property values continue to be unstable in the City and future assessed valuation is expected to decrease. Labor Force - Goodyear has a well-educated and available labor force. Educational level of Goodyear heads of household: 85% are college educated with 56% obtaining college degrees. The estimated median income level is $79,226 for FY 2011 and approximately 47% have a household income of over $75,000. The City is a member of the Greater Phoenix Economic Council (GPEC) which has been successful at introducing new businesses to the City. The City maintains an economic development department "in-house" which has been very instrumental in locating retail, hospitality, office, and industrial businesses to the City. In addition, the economic development department has also been proactively recruiting public and private institutions of higher education. x xi xii CITY OF GOODYEAR LIST OF PRINCIPAL OFFICIALS MAYOR Georgia Lord VICE MAYOR Joanne Osborne COUNCIL MEMBERS Wally Campbell Gary Gelzer Sheri Lauritano Joe Pizzillo William Stipp SENIOR MANAGEMENT STAFF John Fischbach City Manager Michael Simonson Presiding Judge Roric Massey City Attorney Brian Dalke Deputy City Manager Paul Luizzi Interim Deputy City Manager Lynn Mulhall City Clerk Wynette Reed Human Resources Director Paula Ilardo Economic Development Director Bill Cusson Interim Police Chief Mark Gaillard Fire Chief Harvey Krauss Community Development Director Larry Lange Finance Director Kathy Fernandez Information Technology Director Charles McDowell Public Works Director David Ramirez Engineering Director Mike Svetz Park & Recreation Director Mario Saldamando Assistant to the City Manager Romina Khananisho Intergovernmental Programs Manager xiii xiv Municipal Court Eduardo Cruz Administrator Presiding Judge Michael Simonson Public Works Charles McDowell Director Parks & Recreation Mike Svetz Director Human Resources Wynette Reed Director Finance Larry Lange Director Deputy City Manager Brian Dalke Mayor/Council Support Integovernmental Programs Romina Khananisho Manager Intergovermental & Grant Programs Information Technology Services Kathy Fernandez Director Fire Mark Gaillard Chief Assistant to the City Manager Mario Saldamando Community Development Harvey Krauss Director Engineering David Ramirez Director Interim Deputy City Manager Paul Luizzi Interim Police Chief Bill Cusson Economic Development Paula Ilardo Director City Clerk Lynn Mulhall City Manager John Fischbach Mayor & City Council Citizens of Goodyear Legal Services City Attorney Roric Massey ACKNOWLEDGEMENTS The Comprehensive Annual Financial Report was prepared by the staff of the Finance Department – Accounting, Community Facilities District and Utility Customer Service Divisions: Theresa Simms, MBA, CPA Michelle Gammage, CPA MaryKae Struck, MBA Kathy Painter Regina Mullaney Sheila Mills Carmelita Evans Marty Eckstaine xv Financial Section INDEPENDENT AUDITORS' REPORT The Honorable Mayor and Council City of Goodyear, Arizona We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of City of Goodyear (the City), Arizona, as of and for the year ended June 30, 2011, which collectively comprise the City’s basic financial statements as listed in the table of contents. These financial statements are the responsibility of the City’s management. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Goodyear, Arizona, as of June 30, 2011, and the respective changes in financial position and cash flows, where applicable, thereof and the respective budgetary comparison for the General Fund for the year then ended in conformity with accounting principles generally accepted in the United States of America. In connection with our audit, nothing came to our attention that caused us to believe that the City of Goodyear failed to use highway user revenue fund monies received by the City of Goodyear pursuant to Arizona Revised Statutes Title 28, Chapter 18, Article 2 and any other dedicated state transportation revenues received by the City of Goodyear solely for the authorized transportation purposes. However, our audit was not directed primarily toward obtaining knowledge of such noncompliance. Tempe 2055 E. Warner Road Suite 101 Tempe, AZ 85284-3487 (480) 839-4900 Fax (480) 839-1749 Scottsdale 7098 E. Cochise Road Suite 100 Scottsdale, AZ 85253-4517 (480) 483-1170 Fax (480) 483-7126 Casa Grande 1115 E. Cottonwood Lane Suite 100 Casa Grande, AZ 85122-2950 (520) 836-8201 Fax (520) 426-9432 w w w . h e n r y a n d h o r n e . c o m In accordance with Government Auditing Standards, we have also issued our report dated November 15, 2011 on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 5 through 15 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Our audit was conducted for the purpose of forming an opinion on the financial statements that collectively comprise the City of Goodyear, Arizona’s basic financial statements. The introductory section, the accompanying financial information listed as other supplementary information in the financial section, and the statistical section, are presented for purposes of additional analysis and are not a required part of the basic financial statements. The financial information listed as other supplementary information in the financial section has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. The introductory section and the statistical section have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on them. The accompanying schedule of expenditures of federal awards (required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Government, and Non-Profit Organizations) is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. Casa Grande, Arizona November 15, 2011 Financial Section MANAGEMENT’S DISCUSSION & ANALYSIS 3 4 MANAGEMENT’S DISCUSSION AND ANALYSIS For The Year Ended June 30, 2011 As management of the City of Goodyear, Arizona (City), we offer readers of the City’s financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended June 30, 2011. This discussion and analysis is designed to (1) assist the reader in focusing on significant financial issues, (2) provide an overview of the City’s financial activity, (3) identify changes in the City’s financial position, (4) identify any material deviations from the financial plan (the approved annual budget), and (5) identify individual fund issues or concerns. The management’s discussion and analysis (MD&A) has different focus and purpose than the letter of transmittal presented on pages vii-xi of this report and is designed to be read in conjunction with the transmittal letter as well as the financial statements beginning on page 17 and the accompanying notes to the financial statements. FINANCIAL HIGHLIGHTS ♦ The City’s total net assets decreased $.3 million (.05%) in fiscal year 2011, an increase in governmental activities of $3.5 million (.78%) and a decrease in business activities of $3.8 million (1.97%). ♦ Total net assets of the City are $647.9 million, of which $27.5 million is unrestricted (up $3.9 million, 16.39%, from last year’s $23.6 million unrestricted net assets). ♦ The governmental activities program revenues decreased by $1.8 million (6.28%) from the previous fiscal year. This was primarily due to decrease in capital grants and contributions in the amount of $2.5 million (15.12%). Charges for service increased by $.5 million (5.54%) and operating grants and contributions increased by $.2 million (3.00%). ♦ The business-type activities program revenues decreased by $.2 million (.83%) from the previous fiscal year. This was primarily due to a decrease in capital grants and contributions in the amount of $1.6 million (26.41%) and an increase in charges for service of $1.4 million (5.91%). ♦ At June 30, 2011, total fund balance of the governmental funds was $63.7 million, a decrease of $1.6 million (2.54%) from the previous year. The majority of this decrease can be attributed decrease in taxes of $1.7 million (3.02%) due to the economic downturn. Approximately 30.06% of this total amount ($19.1 million) is unassigned fund balance available for spending at the government’s discretion. ♦ At June 30, 2011, total unassigned fund balance for the General Fund is $21.5 million, a decrease of $1.2 million (5.36%) from the prior fiscal year. This decrease is due to transfers to grant funds that will be reimbursed in the following year. ♦ At June 30, 2011, the City’s proprietary funds reported combined net assets decreased by $3.8 million (1.97%) from the prior fiscal year. This decrease was due to increase debt service payment of $1.6 million and decrease in capital contributions of $1.6 million. $3.6 million of net assets are restricted of this $.9 is restricted for capital assets and $2.7 for debt service. ♦ The City Council adopted an investment policy allowing staff more flexibility in investment options thus increasing of possibilities to earn a higher rate of return while maintaining the emphasis on safety and liquidity in the funds. At June 30, 2011, the City’s total investment balance was $27.0 million of which $24.1 million is shown in investment and $2.8 is shown in restricted cash. In accordance with the City’s investment policy these funds were moved from the cash and cash equivalent accounts in the previous fiscal year. 5 OVERVIEW OF FINANCIAL STATEMENTS This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements. The City’s basic financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of the City’s finances, in a manner similar to a private sector business. All of the activities of the City, except those of a fiduciary nature, are included in these statements. The activities of the City are shown in two columns on these statements – governmental activities and business-type activities. A total column for the City is also provided. • Governmental activities – Most of the City’s basic services are included here, such as general government (administration), public safety (police, fire and court), highways and streets, public works, culture and recreation, and community development. These activities are generally supported by taxes and general revenues. • Business-type activities – The services provided by the City included here are stadium, water, wastewater, and sanitation services. These activities are primarily supported through user charges or fees. The statement of net assets presents information on all of the City’s assets and liabilities, both current and long-term, with the difference between the assets and liabilities reported as net assets. The focus on net assets is designated to be similar to the emphasis for businesses. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the City may be changing. Increases in net assets may indicate an improved financial position; however, even decreases in net assets may reflect a changing manner in which the City may have previously accumulated funds (i.e. cash funding of capital projects). To assess the overall health of the City, other indicators, including non-financial indicators like the City’s property tax base and condition of its infrastructure, should also be considered. The statement of activities presents information showing how the City’s net assets changed over the most recent fiscal year. Since full accrual accounting is used for the government-wide financial statements, all changes to net assets are reported at the time of the underlying event, giving rise to the change, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused compensated absences). The government-wide financial statements can be found on pages 19-21 of this report. Fund Financial Statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental Funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating the City’s near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the City’s near-term financing decision. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. These reconciliations are on pages 27 and 31 respectively. 6 The City maintains ten individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the General Fund, Community Facilities Districts – Debt Service, McDowell Road Improvements District – Debt Service, and Non-Utility Development Impact Fees all of which are considered to be major funds. Data from the other six governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements and schedules beginning on page 77 of this report. The governmental fund financial statements can be found on pages 23–33 of this report. Proprietary funds. The City maintains five proprietary funds. Proprietary funds (enterprise and internal service) utilize full accrual accounting, the same method used by private sector business. The City uses separate enterprise funds to account for its stadium, water and sewer services and its sanitation services. These funds are considered to be major funds of the City. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The city has two internal service funds – Fleet Management and the Health Insurance. The Fleet Management Fund reports activities that provide preventative maintenance, repairs and safety inspections for City vehicles and equipment. The Health Insurance Fund is used for the City’s wellness initiative and to build up a reserve for when the City becomes self funding. The Internal service fund activities are reported as governmental activities on the government-wide statements. The proprietary fund financial statements can be found on pages 35-40 of this report. Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the City. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the City’s own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The fiduciary fund financial statements can be found on pages 41-44 of this report. Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 45-76 of this report. Other information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the City’s budget process. The City adopts an annual budget for all governmental funds. A budgetary comparison statement has been provided for the General Fund as part of the basic financial statements. The required supplementary information can be found on pages 89-105 of this report. The combining statements referred to earlier in connection with non-major governmental funds is presented immediately following the notes to the financial statements. Combining and individual fund statements and schedules can be found on pages 99-83 and 85-88 of this report. 7 GOVERNMENT-WIDE FINANCIAL ANALYSIS The following tables, graphs and analysis discuss the financial position and changes to the financial position of the City as a whole as of the year ended June 30, 2011 with comparative information for the previous year. Net Assets Net assets may serve over time as a useful indicator of a government’s financial position. The following table reflects the condensed Statement of Net Assets of the City as of June 30, 2011 compared to the prior year. Statement of Net Assets as of June 30 Governmental Business-type Total Activities Activities Primary Government 2010 2011 Current and other assets $ $ 2010 2011 Percent 2010 $ 191,564,783 Change 153,591,426 $ 36,927,125 $ 37,973,357 $ 187,963,814 Capital assets 531,058,572 532,037,489 410,952,117 408,882,016 942,010,689 940,919,505 0.12% Total assets 682,095,261 685,628,915 447,879,242 446,855,373 1,129,974,503 1,132,484,288 -0.22% Other liabilities 151,036,689 2011 -1.88% 25,448,349 21,277,011 14,641,167 15,879,364 40,089,516 37,156,375 7.89% 200,788,304 212,035,847 241,152,470 235,027,670 441,940,774 447,063,517 -1.15% 226,236,653 233,312,858 255,793,637 250,907,034 482,030,290 484,219,892 -0.45% 327,503,686 317,162,459 179,254,929 191,582,614 506,758,615 508,745,073 -0.39% Courts 198,457 149,991 - - 198,457 149,991 32.31% Law enforcement 129,231 263,686 - - 129,231 263,686 -50.99% Highw ays and streets 285,914 209,080 - - 285,914 Community facilities 536,230 1,095,057 - - 536,230 Long-term liabilities outstanding Total liabilities Net assets: Invested in capital assets, net of related debt Restricted for: 209,080 36.75% 1,095,057 -51.03% Debt service 86,963,445 91,442,376 2,661,924 - 89,625,369 91,442,376 Capital projects 21,992,019 22,720,860 905,313 - 22,897,332 22,720,860 0.78% 18,249,626 19,272,548 9,263,439 4,365,725 27,513,065 23,638,273 16.39% 452,316,057 $ 192,085,605 $ 195,948,339 $ 647,944,213 648,264,396 -0.05% Unrestricted Total net assets $ 455,858,608 $ $ -1.99% For fiscal year 2011 the net assets of the City decreased by $.3 million (.05%) over the previous year. Net assets of the governmental activities increased by $3.5 million (.78%), while the business-type activities decreased by $3.8 million (1.97). Net assets consist of three components, the largest portion is invested in capital assets, net of related debt of $506.7 million (78.2%) reflects the City’s investment in capital assets net of accumulated depreciation and any related outstanding debt used to acquire or construct those assets. The City uses these capital assets to provide services to its citizens. Consequently, it is not the City’s intention to sell these assets and they are therefore not available for future spending. Although the capital assets are reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves are not intended to be used to liquidate these liabilities. This category of net assets decreased by $2.0 million (0.39%) in fiscal year 2011. The City’s second portion is restricted net assets of $113.7 million (17.54%) represents resources that are subject to external restrictions on how they may be used. The decrease of $2.2 million results from no debt issuance for capital for the Community Facilities Districts ($.5 million) and reduction in debt service ($1.8 million). 8 The City’s third portion is unrestricted net assets of $27.5 million (4.25%). These net assets may be used to meet the City’s ongoing obligations to citizens and creditors. This category increased $3.9 million (16.39%) from the previous fiscal year. Unrestricted net assets are the balance of net assets remaining after calculating the other two categories discussed above. Unrestricted net assets of governmental activities decreased by $1.0 million, while unrestricted net assets of the business-type activities increased $4.9 million. This increase in unrestricted net assets was from the Water and Sewer $1.4 million for charges for services and reimbursement $3.5 from WIFA for capital. Changes in Net Assets. The following table compares the revenues and expenses for the current and previous fiscal year. Changes in Net Assets for Year End June 30 Governmental Business-type Total Activities Activities Primary Government 2011 2010 2011 2010 2011 Percent 2010 Change REVENUES: Program revenues: Charges for services $ 6,811,781 $ 6,276,022 $ 24,973,155 $ 23,579,235 $ 31,784,936 $ 29,855,257 6.46% Operating grants and contributions 5,818,158 5,648,867 - - 5,818,158 5,648,867 3.00% 13,951,581 16,436,375 4,570,849 6,211,533 18,522,430 22,647,908 -18.22% Capital grants and contributions General revenues: Sales taxes 32,729,749 31,448,399 - - 32,729,749 31,448,399 4.07% Property taxes 18,548,550 21,941,576 - - 18,548,550 21,941,576 -15.46% Franchise taxes 2,316,820 2,233,909 - - 2,316,820 2,233,909 3.71% State shared revenue 9,699,146 10,907,518 - - 9,699,146 10,907,518 -11.08% 227,446 179,114 71,819 57,527 299,265 236,641 26.46% Investment income Proceeds from sale of w ater rights - - - 4,352,000 - 4,352,000 100.00% 827,619 2,026,285 638,611 100,698 1,466,230 2,126,983 -31.07% 90,930,850 97,098,065 30,254,434 34,300,993 121,185,284 131,399,058 -7.77% General government 15,765,527 14,767,660 - - 15,765,527 14,767,660 6.76% Public safety 29,474,246 28,960,907 - - 29,474,246 28,960,907 1.77% Highw ays and streets 14,798,670 12,179,531 - - 14,798,670 12,179,531 21.50% Public w orks 3,658,756 11,070,853 - - 3,658,756 11,070,853 -66.95% Culture and recreation 4,439,181 4,023,639 - - 4,439,181 4,023,639 10.33% Community development 5,150,677 2,555,353 - - 5,150,677 2,555,353 101.56% 10,710,302 11,210,504 - - 10,710,302 11,210,504 -4.46% Water and sew er - - 20,733,932 18,124,893 20,733,932 18,124,893 14.39% Sanitation - - 4,815,314 4,782,565 4,815,314 4,782,565 0.68% Stadium - - 11,958,862 11,547,500 11,958,862 11,547,500 100.00% Total expenses 83,997,359 84,768,447 37,508,108 34,454,958 121,505,467 119,223,405 1.91% 12,175,653 -102.63% Miscellaneous Total revenues EXPENSES: Program activities: Governmental activities: Interest on long-term debt Business activities: Increase in net assets before transfers Transfers Increase in net assets Net asset July 1 Net asset June 30 6,933,491 12,329,618 (7,253,674) (3,390,940) (7,815,285) 3,390,940 7,815,285 3,542,551 4,514,333 (3,862,734) 7,661,320 452,316,057 $ 455,858,608 $ 447,801,724 195,948,339 452,316,057 $ 192,085,605 (153,965) $ (320,183) (320,183) - 0.00% 12,175,653 -102.63% 188,287,019 648,264,396 636,088,743 1.91% 195,948,339 $ 647,944,213 $ 648,264,396 -0.05% For fiscal year 2011, the total revenues of $121.2 million decreased approximately $10.2 million (7.77%) from the previous fiscal year. This decreased occurred for both governmental and business-type activities. Total governmental revenues decreased by $6.2 million (6.35%) and total business-type revenues decreased by $4.0 million (11.80%). The primary drivers of the governmental revenues were property taxes, levied for debt service, sales and use taxes and state shared revenues. The decline in revenues are a direct result of the current downturn in the economy, the areas affected the most are 9 property taxes, which decreased by $3.4 million (15.46%) and state shared revenues, which decreased by $1.2 million (11.08%). The City’s property taxes primary assessed valuation decreased from $1.60 per $100 of assessed value to $1.42 per $100. State shared revenues are derived from state shared sales taxes, state income taxes and vehicle license taxes which are distributed to the City based upon population, hence when the economy falls so do these revenues. Program revenues of governmental activities decreased by $1.8 million (6.28%), primarily for capital grants and contributions, which decreased $2.5 million (15.12%), charges for services increased by $.5 million (8.54%) and operating grants and contribution increased $.2 million (3.00%) and decreased $.2 million (2.4%). As stated earlier the decrease in capital grants and contributions resulted from a decline in capital projects. The business-type activities program revenues increased by $15.1 million (31.1%) from the previous fiscal year. The business-type program revenues decreased by $.2 million (.83%) from the previous fiscal year, due to reduction in capital grants and contributions of $1.64 million (26.41%) for capital projects and increase in charges for services for $1.4 million (5.91%) primarily from water and sewer customers from rate increases. Total government-wide expenses (not including transfers out) are $121.5 million, an increase of $2.3 million from the previous fiscal year. Expenses in the governmental activities decrease by $.8 million, primarily for interest on long-term debt of $.5 million. The public works expenses decreased by $7.4 million primarily because of the reduction in capital activity for CFD and the City. All other categories increased because of reclassification of activities in the prior year to current categories. Expenses in the business activities totaled $37.5 million (30.9% of functional expenses), an increase of $3.1 million from the previous fiscal year. The largest category of business expenses are water and sewer expenses of $20.7 million, an increase by $2.6 million primarily because of increased interest expense of $1.6 million and $.5 million for cost of sales and services. Stadium expenses increased by $.4 million primarily for depreciation. Government-Wide Revenue Sources Fiscal Year 2011 Operating grants and contributions 4.8% State shared revenue 8.0% Miscellaneous 1.2% Charges for services 26.2% Franchise taxes 1.9% Capital grants and contributions 15.3% Investment income 0.2% Sales taxes 27.0% Property taxes 15.3% The pie chart above is a depiction of Government-Wide Revenue Sources, governmental activities account for 75.0% of total revenues, while business activities account for 25.0% of total revenues. Sales taxes continue to be the largest source of City revenues at 27.0%, a 4.1% increase from the previous 10 fiscal year. Next are charges for services at 26.2% of revenue, which increased by 6.5% over the previous fiscal year primarily for the business-type activities. The City Council had approved an increase in water and sewer rates starting in fiscal year 2010 for the next four years, this is the second year of the increase. Property taxes another major governmental revenue represents 15.3% of the total revenues. Another major component of revenues is capital grants and contributions which is 15.3% of total revenues. As seen in the following pie chart for Government-Wide Functional Expenses, business-type activities account for 30.9% of total functional expenses, while governmental activities account for 69.1% of total functional expenses. For the governmental activities, the largest users of resources are public safety 24.3% of total expenses (34.2% of governmental expenses), general government 12.4% total expenses (17.4% of governmental expenses), highways and streets 10.2% of total expenses (14.4% of governmental expenses), and public works 9.3% of total expenses (13.1% of governmental expenses). Total government-wide expenses (not including transfers out) of the City decreased by 3.3% in fiscal year 2011. This decrease is a direct result of a number of belt tightening measures by the City to reduce expenses during this down turn in the economy. Government-Wide Functional Expenses Fiscal Year 2011 General government 13.0% Business activities 30.9% Public safety 24.3% Interest on longterm debt 8.8% Community development 4.2% Culture and recreation 3.7% Public works 3.0% Highways and streets 12.2% FINANCIAL ANALYSIS OF THE CITY’S FUNDS The City maintains fund accounting to demonstrate compliance with budgetary and legal requirements. The following is a brief discussion of financial highlights from the fund financial statements. Governmental funds The focus of the City’s governmental funds (pages 23-33) is to provide information on near-term inflows, outflows, and balances of spendable resources. All major governmental funds are discreetly presented on these financial statements, while non-major funds are combined into a single column. Combining statement for non-major funds may be found on pages 77-88. 11 At the end of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $63.7 million, a decrease of $1.6 million (2.54%) from the previous year. Approximately $19.1 million (30.06%) of the total ending fund balance constitutes unassigned fund balance, which is available for spending at the City’s discretion. The remainder of fund balance is (1) non-spendable $1.7 million (2.31%) of total ending fund balance for advance to other funds, inventories and prepaid items, (2) restricted $41.5 million (65.11%) of the total ending fund balance for charter mandates, court, law enforcement, debt service, capital projects, highway user funds and Community Facilities Districts operations, (3) assigned $1.4 million (2.12%) of the total ending fund balance for IT replacement, Fleet replacement and risk management insurance. Revenues for governmental functions overall totaled $87.1 million in the fiscal year ended June 30, 2011 which represents a decrease of 6.01% or $5.5 million from the previous fiscal year. Five revenue categories show decreases over the previous fiscal year. These include property taxes ($3.1 million), intergovernmental revenues ($.6 million), special assessments ($1.7 million), contributions ($.3 million) and miscellaneous ($1.8 million). Property taxes decline based on the reduction in the assessed value as state above. Special assessment decline because there were no new debt issue for capital projects. Intergovernmental revenues decline due to reduction in stated shared revenues because of the downturn in the economy as these revenues are distributed to the City based on population. Miscellaneous decline is due to reclassification of revenues to the proper classification in fiscal year 2011. All the other categories of revenues experience an increase of $2.0 million. The City’s investment income increase by 26.23% over the previous fiscal year due to the investment policy the City received a higher rate of return on the investments. Expenditures for governmental functions ($86.3 million) decreased by 5.20% ($4.7 million) from the previous fiscal year. The expenditure decrease is driven primarily by decreases in capital outlay $4.2 million and interest on debt $.5 million. The capital projects were reduced in fiscal year 2011. In fiscal year ended June 30, 2011 revenues for the governmental functions exceeded expenditures by approximately $.8 million. However, transfer out exceeded transfer in by $2.5 million resulting in a decrease in governmental fund balance of $1.7 million. The majority of the transfers out were subsidy of debt service in the enterprise funds. The General Fund is the chief operating fund of the City. At the end of the current fiscal year, the unassigned fund balance of the General Fund was $21.5 million. As a measure of liquidity, it may be useful to compare total unassigned fund balance and total fund balance to total expenditures. The unassigned fund balance represents 38.12% of General Fund expenditures. The fund balance of the City’s General Fund decreased by $.8 million during the fiscal year as revenues had a positive growth of $.7 million and expenditures and transfer had a negative growth of $1.5 million. This is an increase of approximately $2.2 million in operational cost over comparable figure from previous fiscal year. Proprietary funds The proprietary fund financial statements are prepared on the same accounting basis and measurement focus as the government-wide financial statement, but provide additional detail since each major enterprise fund is shown discretely. The proprietary funds statements can be found on pages 35-40. The proprietary funds net asset was $192.1 million a decreased by $3.8 million from the previous fiscal year. The Water and Sewer fund had a positive increase in their net assets of $.5 million for the fiscal year ended June 30, 2011 due to the increase in water and sewer rates while the Sanitation decreased slightly and the Stadium fund decreased by $4.3 million due to increase in depreciation of $.6 million and reduction in transfer in $1.7 million for debt service. The proceeds from the PIC 2008 that remained with the trustee were use to offset the debt payment. BUDGETARY HIGHLIGHTS The City’s annual budget is the legally adopted expenditure control document of the City. The schedules filed with the Auditor General’s office list the original budget adopted for the prior year, estimated expenditures through the end of the fiscal year and the adopted current year’s budget. Budgetary 12 comparison schedules are required for the General Fund, all major funds, non-major funds and enterprise funds. The General Fund budgetary comparison statement can be found on pages 32-33. The other budgetary comparison schedules can be found in the Other Supplementary Information section on pages 89-105. The City has reduced both the budgeted inflows and outflows due to the downturn in the economy. General Fund actual inflows (revenues and other financing sources) of $62.8 million, was more than budget inflows of $60.5 million by $2.3 million (3.8%), while expenditures and other financing uses of $63.6 million was only 75.1% of final budgeted outflows of $84.7 million. Revenues increased in most categories, the most notable being taxes which had favorable variance of $1.6 million while the other revenue categories experience slight increases. Expenditures are under budget in every category except building inspection and interest and fiscal charges due to advance planning for revenue shortfalls, normal salary savings due to turnover, and not spending appropriation on large budgeted capital projects. Both transfer in and transfer out are less than budgeted as many transfers are based on the actual year end expenditure, most significant is the transfer to Highway User Revenue and Stadium funds. CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets The City’s capital assets (net of accumulated depreciation) for its governmental and business-type activities as of June 30, 2011 amounted to $942.0 million. Capital assets include land, artwork, construction in progress, right of way, water rights, streetscape, infrastructure, buildings and improvements and vehicles, furniture and equipment. The total increase in the City’s capital assets for the current fiscal year is $1.1 million (.1%) from the previous fiscal year. The following schedule presents capital asset balances for the fiscal year ended June 30, 2011 and 2010. Capital Assets at June 30 (Net of depreciation) Governmental Activities 2010 2011 Land Artwork Construction in progress Right of way Water rights Streetscape Infrastructure Building and improvements Vehicles, furniture and equipment Total $ 19,426,644 186,900 10,682,782 90,128,522 8,755,008 271,418,179 120,554,781 9,905,756 $ 531,058,572 Business-type Activities $ 19,426,644 13,835,365 90,128,522 8,305,608 271,464,650 116,945,719 11,930,981 $ 532,037,489 2011 $ 14,754,260 75,800 90,092,123 16,076,434 284,910,620 5,042,880 $ 410,952,117 Total Primary Government 2010 $ 14,754,260 90,159,414 16,097,695 282,303,327 5,567,320 $ 408,882,016 2011 $ 34,180,904 262,700 100,774,905 90,128,522 16,076,434 8,755,008 271,418,179 405,465,401 14,948,636 $ 942,010,689 2010 $ Percent Change 34,180,904 103,994,779 90,128,522 16,097,695 8,305,608 271,464,650 399,249,046 17,498,301 0.0% 100.0% -3.1% 0.0% -0.1% 5.4% 0.0% 1.6% -14.6% $ 940,919,505 0.1% The additions to capital asset included the completion of the City’s park and ride facilities for $4.5 million and replacement vehicles and equipment for $1.3 million. For government-wide financial statement presentation, all depreciable capital assets are depreciated from acquisition date to the end of the current fiscal year. Additional information on the City’s capital assets can be found in Note 4 on pages 61-62 and in the schedules on pages 113-118 of this report. 13 Debt Administration At the end of the current fiscal year, the City had total long-term debt outstanding of $444.5 million. Of this amount $122.5 million is general obligation bonds backed by the full faith and credit of the City, $117.2 million is Community Facilities Districts bonds which are paid by the property owners within those districts, $184.0 million of revenue bonds which are payable from user fees and assessments, $12.6 million loan payable to WIFA by user fees, $3.8 million contract payable paid from excise taxes, and $4.5 million compensated absences from the City operating funds. The following schedule shows the outstanding debt obligation as of June 30, 2011 and 2010. Outstanding Debt as of June 30 Governmental Activities General obligation debt Community Facilities Districts bonds Loan payable Revenue bonds Water rights Contracts payable Compensated absences Total outstanding bonds Business-type Activities Total Primary Government Percent 2011 2010 2011 2010 2011 2010 Change $ 31,358,457 $ 33,601,981 $ 91,121,544 $ 92,753,019 $ 122,480,001 $ 126,355,000 117,182,000 49,410,000 3,755,628 4,080,331 122,313,000 51,290,000 5,755,628 3,790,807 12,554,096 134,545,000 463,890 9,925,289 119,340,000 10,314,041 419,694 117,182,000 12,554,096 183,955,000 3,755,628 4,544,221 $ 205,786,416 $ 216,751,416 $ 238,684,530 $ 232,752,043 $ 444,470,946 $ 449,503,459 -1.1% $ 197,950,457 $ 207,204,981 $ 238,220,640 $ 222,018,308 $ 436,171,097 $ 429,223,289 -1.3% -3.1% 122,313,000 -4.2% 9,925,289 26.5% 170,630,000 7.8% 10,314,041 -100.0% 5,755,628 -34.7% 4,210,501 7.9% The outstanding revenue bonds include $44.9 in McDowell Road Corridor Improvement District that is secured by pledges of specific revenue sources of the City. In addition to these are $139.1 million in Public Improvement Corporation bonds $134.6 for the Stadium and $4.5 million for the City. The State constitution limits the amount of general obligation debt a city may issue to 6 percent of its total assessed valuation. The current 6% debt limitation for the City is $50.9 million. In addition, the State constitution limits allows a city to issue an additional 20 percent of its total assessed valuation for water, sewer, lights, transportation, public safety, open space preserves, parks, playgrounds and recreational facilities. The current 20% debt limitation for the City is $169.8 million. The City has $122.2 million outstanding general obligation debt for these purposes. During the year, the City maintained the following bond ratings: Bonded Debt Ratings As of June 30, 2011 Type of Debt Moody's Investors Service Standard & Poor's General Obligation Water & Sewer (Revenue) Public Improvement Corporation Aa2 A2 Aa3 AAA+ AA- Additional information on the City’s long-term debt can be found in Notes 5 – 11 on pages 62-69 of this report. 14 ECONOMIC FACTORS AND NEXT YEAR’S BUDGET The unemployment rate for Goodyear for June 2011 was 6.4%, which remains below both the State (9.3%) and national average (9.2%). Arizona cities remain dependent on sales taxes and other economically sensitive tax revenues and are susceptible to slowdowns in the economy. While unemployment is not a leading economic indicator, a strong economic recovery will likely coincide with a significant improvement in current unemployment rates. The City is projected a positive outlook for fiscal year 2012 with increase in revenues. Sales taxes are the dominant revenue source for the City and are projected to increase in fiscal year 2012 from $30.4 million to $33.6 million an increase of 10.5%. Property taxes are project to increase in fiscal year 2012 from $6.0 million to $6.3 million an increase of 5.0%. State shared revenues which are combination of state shared sales tax, state shared income tax and vehicle license tax are projected to increase by $3.3 million from $9.6 million in fiscal year 2011 to $12.6 million in fiscal year 2012. The City operational budget is project to increase by the 2.0% in fiscal year 2012 from $70.9 million to $72.3 million due to increase operating cost. The City project capital improvement expenditure is $11.8 million for stadium infrastructure $5.7 million, SR303 $2.0 million, wash rack fuel site & storage facility $1.2 million and other capital projects. CONTACTING THE CITY’S FINANCIAL MANAGEMENT This financial report is designed to provide our citizens, taxpayers, customers, and investors and creditors with a general overview of the City’s finances and to demonstrate the City’s accountability for the resources it receives. A copy of the City's Comprehensive Annual Financial Report is available on-line at http://www.goodyearaz.gov/index.asp?NID=1792. If you have questions about this report or need additional information, contact the City’s Controller, City of Goodyear, 190 N. Litchfield Road, or by mail at P.O. Box 5100, Goodyear, Arizona 85338. 15 16 Financial Section BASIC FINANCIAL STATEMENTS Government-wide Financial Statements - include the Statement of Net Assets and Statement of Activities and use the accrual basis of accounting for financial reporting. Governmental Funds Financial Statements - include the Balance Sheet and Statement of Revenues, Expenditures, and Changes in Fund Balance for the major governmental funds that use the modified accrual basis of reporting. Also include the reconciliations to the government-wide financial statements. Proprietary Funds Financial Statements - include the Statement of Net Assets, Statement of Revenues, Expenses and Changes in Fund Net Assets and Statement of Cash Flows for the business-type activities that use the accrual basis of accounting for financial reporting. Fiduciary Funds Financial Statements - include the Statement of Net Assets and the Statement of Changes in Net Assets for assets being held for the benefit of parties outside of the City. Notes to the Financial Statements 17 18 CITY OF GOODYEAR, ARIZONA STATEMENT OF NET ASSETS June 30, 2011 ASSETS Cash and cash equivalents Investments Receivables (net of allowance for uncollectibles) Due from other governments Internal balances Due from fiduciary fund Inventories Prepaid items Deferred charges Restricted cash and cash equivalents Capital assets: Nondepreciable capital assets Other capital assets (net of accumulated depreciation) Total assets LIABILITIES Accounts payable and other current liabilities Accrued payroll and employee benefits Accrued interest payable Deposits held for others Unearned revenue Liabilities payable from restricted assets Noncurrent liabilities: Due within one year: Compensated absences Bonds payable Due in more than one year: Compensated absences Loans payable Bonds payable Interest payable Deferred amount on refunding Total liabilities NET ASSETS Invested in capital assets, net of related debt Restricted for: Courts Law enforcement Highways and streets Capital projects Community facilities Debt service Unrestricted Total net assets See accompanying notes. Governmental Activities $ 27,152,112 21,064,279 73,515,815 2,564,935 961,840 330,174 468,920 5,028,195 19,950,419 Business-type Activities $ 7,682,763 3,064,847 3,145,760 319,067 (961,840) 43,243 623,100 2,483,935 20,526,250 Total $ 34,834,875 24,129,126 76,661,575 2,884,002 43,243 953,274 468,920 7,512,130 40,476,669 129,179,854 104,922,187 234,102,041 401,878,718 682,095,261 306,029,930 447,879,242 707,908,648 1,129,974,503 3,168,558 788,739 3,090,835 3,866,254 7,687,050 1,612,010 96,944 3,266,556 824,844 298,139 4,780,568 885,683 6,357,391 4,691,098 7,985,189 8,360,080 8,360,080 182,594 - 1,596,507 5,433,000 - 1,413,913 5,433,000 2,666,418 3,755,628 194,530,214 (163,956) 226,236,653 281,296 12,554,096 227,364,410 1,187,390 (234,722) 255,793,637 2,947,714 16,309,724 421,894,624 1,187,390 (398,678) 482,030,290 327,503,686 179,254,929 506,758,615 198,457 129,231 285,914 21,992,019 536,230 86,963,445 18,249,626 $ 455,858,608 905,313 2,661,924 9,263,439 $ 192,085,605 198,457 129,231 285,914 22,897,332 536,230 89,625,369 27,513,065 $ 647,944,213 19 CITY OF GOODYEAR, ARIZONA STATEMENT OF ACTIVITIES Year Ended June 30, 2011 Program Revenues Operating Capital Charges for Grants and Grants and Services Contributions Contributions Expenses Functions/Programs Primary government: Governmental activities: General government Public safety Highways and streets Public works Culture and recreation Community development Interest on long-term debt Total governmental activities $ 15,765,527 29,474,246 14,798,670 3,658,756 4,439,181 5,150,677 10,710,302 83,997,359 Business-type activities: Water and sewer Sanitation Stadium Total business-type activities 20,733,932 4,815,314 11,958,862 37,508,108 17,634,821 5,774,010 1,564,324 24,973,155 $ 121,505,467 $ 31,784,936 Total primary government $ 1,128,675 1,477,731 325,552 3,879,823 6,811,781 $ 404,746 718,862 4,694,550 5,818,158 $ 7,650,719 6,300,862 13,951,581 $ 5,818,158 4,570,849 4,570,849 $ 18,522,430 General revenues: Sales taxes Property taxes Franchise taxes State shared revenues-not restricted to specific programs Investment income Miscellaneous Transfers in (out) Total general revenues and transfers Changes in net assets Net assets, beginning of year Net assets, end of year See accompanying notes. 20 Net (Expense) Revenue and Changes in Net Assets Governmental Activities $ (14,232,106) (27,277,653) (2,453,401) 2,642,106 (4,113,629) (1,270,854) (10,710,302) (57,415,839) (57,415,839) 32,729,749 18,548,550 2,316,820 9,699,146 227,446 827,619 Business-type Activities $ - Totals $ (14,232,106) (27,277,653) (2,453,401) 2,642,106 (4,113,629) (1,270,854) (10,710,302) (57,415,839) 1,471,738 958,696 (10,394,538) (7,964,104) 1,471,738 958,696 (10,394,538) (7,964,104) (7,964,104) (65,379,943) - 32,729,749 18,548,550 2,316,820 71,819 638,611 9,699,146 299,265 1,466,230 (3,390,940) 60,958,390 3,390,940 4,101,370 65,059,760 3,542,551 (3,862,734) (320,183) 452,316,057 195,948,339 648,264,396 $ 455,858,608 $ 192,085,605 $ 647,944,213 21 22 Government Funds Financial Statements Major Funds General Fund This fund is the general operating fund of the City. It accounts for all financial resources of the City, except those required to be accounted for in other funds. Community Facilities Districts Debt Service Fund This fund accounts for the debt portion of the City’s Community Facilities Districts, which are component units that provide general infrastructure and capital assets for the property within each District’s boundaries. McDowell Road Commercial Corridor Improvement Debt Service Fund This fund accounts for the debt portion of the McDowell Road Improvement Assessments. Non-Utility Development Impact Fee Fund This fund accounts for the receipt and expenditure of development impact or expansion fees for all governmental activities. Non - Major Funds Other governmental funds are the non-major funds and are special revenue, capital projects and debt service funds. These funds can be found on page 80 to 83. 23 CITY OF GOODYEAR, ARIZONA BALANCE SHEET GOVERNMENTAL FUNDS June 30, 2011 ASSETS Cash and cash equivalents Investments Taxes receivable Interest receivable Accounts receivable Special assessments receivable Due from other governments Due from other funds Advances to other funds Inventories Prepaid items Restricted cash and cash equivalents Total assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Accrued payroll and employee benefits Deposits held for others Due to other funds Deferred revenue Liabilities payable from restricted assets Total liabilities Fund balances: Nonspendable: Advances to other funds Inventories Prepaid items Restricted by: Charter mandates Court Law enforcement Debt service Capital projects Highway user funds Community Facilities Districts operations Assigned to: IT replacement Fleet replacement Risk management insurance Unassigned Total fund balances Total liabilities and fund balances See accompanying notes. $ $ $ $ General 12,147,778 11,662,068 5,305,121 39,231 1,076,889 3,118,678 961,840 3,627 422,681 1,037,502 35,775,415 2,090,454 768,489 616,255 4,539,707 4,769 8,019,674 Community Facilities DistrictsDebt Service $ 135,580 21,444,548 46,238 17,587,899 $ 39,214,265 McDowell Road Commercial Corridor Improvement Debt Service $ 44,900,000 72,563 $ 44,972,563 $ $ 3,249,999 21,545,265 24,795,264 44,900,000 44,900,000 961,840 3,627 422,681 46,238 3,209,321 198,457 129,231 - 14,372,763 - 72,563 - 407,961 383,225 558,310 21,481,088 27,755,741 14,419,001 72,563 35,775,415 $ 39,214,265 - $ 44,972,563 24 Non-Utility Development Impact Fees $ 13,539,937 9,402,211 32,355 $ 22,974,503 Non-Major Governmental Funds $ 1,407,448 582,022 69 2,564,935 289,782 1,252,455 $ 6,096,711 Total Governmental Funds $ 27,095,163 21,064,279 6,022,723 71,586 1,076,958 66,344,548 2,564,935 3,118,678 961,840 293,409 468,919 19,950,419 $ 149,033,457 $ $ $ 804,984 177,500 982,484 21,992,019 21,992,019 $ 22,974,503 269,420 19,181 3,024,963 3,339,800 6,653,364 289,782 - 961,840 293,409 468,919 668,186 285,914 536,230 3,209,321 198,457 129,231 15,113,512 21,992,019 285,914 536,230 (2,336,765) (556,653) $ 3,164,858 787,670 3,866,254 3,024,963 74,502,272 4,769 85,350,786 6,096,711 407,961 383,225 558,310 19,144,323 63,682,671 $ 149,033,457 25 26 CITY OF GOODYEAR, ARIZONA RECONCILIATION OF THE BALANCE SHEET TO THE STATEMENT OF NET ASSETS GOVERNMENTAL FUNDS June 30, 2011 Total governmental fund balances $ 63,682,671 Amounts reported for governmental activities in the Statement of Net Assets are different because: Capital assets used in governmental activities are not financial resources and therefore are not reported in the governmental funds. Governmental capital assets Less accumulated depreciation $ 634,597,129 (103,538,557) 531,058,572 Certain revenues earned but not received within 60 days of year-end are deferred for the governmental statements, but are recognized as revenue for the government-wide statements. Grants Property taxes Special assessments 103,601 369,347 66,342,274 Interest payable on long-term debt is not reported in the governmental funds. 66,815,222 (3,090,835) Long-term liabilities are not due and payable in the current period and therefore are not reported in the funds. Compensated absences payable Bond issuance cost Bond refunding amount Loan payable Bonds payable Net assets of governmental activities See accompanying notes. (4,080,331) 5,028,195 163,956 (3,755,628) (199,963,214) (202,607,022) $ 455,858,608 27 CITY OF GOODYEAR, ARIZONA STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS Year Ended June 30, 2011 REVENUES Taxes Licenses and permits Intergovernmental revenues Charges for services Fines and forfeits Investment income (loss) Special assessments Contributions Miscellaneous Total revenues $ EXPENDITURES Current: General government Public safety Highways and streets Public works Culture and recreation Community development Capital outlay Debt service: Principal retirement Interest and debt cost Total expenditures Excess (deficiency) of revenues over (under) expenditures 13,311,744 25,133,860 3,040,437 3,930,803 4,376,985 3,624,546 OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total other financing sources and uses See accompanying notes. 2,720,000 214,265 56,352,640 5,131,000 6,627,707 11,758,707 1,344,969 327,693 28,555,396 $ 27,755,741 1,160,000 2,393,197 3,553,197 (1,328,750) - (799,655) Fund balances, beginning of year McDowell Road Commercial Improvement Debt Service $ 16,747 2,207,700 2,224,447 - 5,102,888 (7,247,512) (2,144,624) Net change in fund balances Fund balances , end of year General 41,004,979 4,541,951 9,699,146 1,462,410 849,060 96,506 18,172 25,385 57,697,609 Community Facilities Districts Debt Service $ 6,713,914 30,683 2,652,049 2,689,754 12,086,400 $ 1,382,196 1,382,196 327,693 53,446 14,091,308 19,117 14,419,001 $ 72,563 28 Non-Utility Development Impact Fees $ 2,501,265 77,024 2,578,289 Non-Major Governmental Funds $ 6,190,407 6,126,712 14,650 4,628 131,705 12,468,102 Total Governmental Funds $ 53,909,300 4,541,951 15,825,858 3,978,325 849,060 225,588 4,859,749 2,707,926 157,090 87,054,847 73,097 1,840,484 1,212,707 300,422 3,735,231 7,305 5,400 3,769,629 14,524,451 25,434,282 3,808,328 3,047,742 3,936,203 4,376,985 9,234,659 1,913,581 2,243,524 1,409,993 12,684,211 11,254,524 10,645,162 86,262,336 664,708 (216,109) 664,708 21,327,311 $ 21,992,019 $ 792,511 1,903,216 (3,590,193) (1,686,977) 8,388,300 (10,837,705) (2,449,405) (1,903,086) (1,656,894) 1,346,433 65,339,565 (556,653) $ 63,682,671 29 30 CITY OF GOODYEAR, ARIZONA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES Year Ended June 30, 2011 Net change in fund balances - total governmental funds $ (1,656,894) Amounts reported for governmental activities in the Statement of Activities are different because: Governmental funds report capital outlays as expenditures. However, in the Statement of Activities the cost of those assets is allocated over their estimated useful lives as depreciation expense. Contributions Expenditures for capitalized assets Less current year depreciation $ 7,650,719 6,186,983 (14,816,619) (978,917) Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds and revenues received in the current year that were accrued in the Statement of Activities in prior years are reported as revenues in the funds. Grants Property taxes Special assessments (312,943) (314,181) (3,763,689) Interest expense in the Statement of Activities differs from the amount reported in governmental funds because accrued interest was calculated for bonds and notes payable for the Statement of Activities, but is expensed when due for the governmental fund statements. 114,688 Governmental funds report the effect of issuance costs, premiums, discounts and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. (185,076) Repayment of long-term debt are expenditures in the governmental funds, but the repayment reduces long-term liabilities in the Statement of Net Assets. Debt principal retirement 11,254,524 Internal service funds are used by management to charge the costs of Fleet service to individual funds. The net income of certain activities of internal service funds is reported with governmental activities. (325,437) Compensated absences expenses reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. (289,524) Change in net assets of governmental activities See accompanying notes. $ 3,542,551 31 CITY OF GOODYEAR, ARIZONA GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended June 30, 2011 Budgeted Amounts REVENUES Taxes Licenses and permits Intergovernmental revenues Charges for services Fines and forfeits Investment income Contributions Miscellaneous Total revenues EXPENDITURES Current General government Mayor and council City clerk City manager City attorney Community services Finance Information technology Human resources Code compliance Public information Non-departmental Reserved contingency Public safety Police Fire Municipal court City prosecutor Public works Administration Building services Culture and recreation Parks Recreation and aquatics Community development Economic development Community development Engineering Building inspection Capital outlay Debt service Principal retirement Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over expenditures See accompanying notes. Variance with Final Budget Positive (Negative) $ 1,626,551 396,032 129,051 124,003 (10,049) (148,161) (1,828) (24,986) 2,090,613 Original $ 39,378,428 4,145,919 9,570,095 1,338,407 859,109 244,667 20,000 50,371 55,606,996 Final $ 39,378,428 4,145,919 9,570,095 1,338,407 859,109 244,667 20,000 50,371 55,606,996 Actual $ 41,004,979 4,541,951 9,699,146 1,462,410 849,060 96,506 18,172 25,385 57,697,609 469,151 702,490 1,683,243 1,067,380 82,650 2,172,255 2,482,484 2,195,800 410,128 559,816 3,800,200 16,347,842 469,151 688,620 1,655,290 1,067,380 2,374,982 2,646,800 2,195,800 394,128 559,816 3,702,918 16,347,842 375,014 616,963 1,629,323 738,685 2,160,642 2,346,507 1,822,793 379,741 549,112 2,692,964 - 94,137 71,657 25,967 328,695 214,340 300,293 373,007 14,387 10,704 1,009,954 16,347,842 13,082,881 10,559,105 1,018,949 414,448 13,286,659 10,630,881 1,067,949 414,448 13,211,518 10,533,076 978,643 410,623 75,141 97,805 89,306 3,825 653,127 2,705,437 623,127 2,606,430 573,540 2,466,897 49,587 139,533 2,642,419 1,366,786 2,642,419 1,366,786 2,615,995 1,314,808 26,424 51,978 397,487 1,032,464 2,388,462 838,314 5,990,699 395,829 1,062,018 2,318,824 822,161 6,450,442 382,374 1,029,941 2,130,522 834,148 3,624,546 13,455 32,077 188,302 (11,987) 2,825,896 2,745,000 200,324 78,009,341 2,745,000 200,324 78,736,024 2,720,000 214,265 56,352,640 25,000 (13,941) 22,383,384 (22,402,345) (23,129,028) 1,344,969 24,473,997 32 Budgeted Amounts OTHER FINANCING Transfers in Transfers out Total other financing sources (uses) Net change in fund balance Fund balance, beginning of year Fund balance, end of year Variance with Final Budget Positive (Negative) (1,097,112) 2,389,661 Original 6,200,000 (8,666,288) Final 6,200,000 (9,637,173) Actual 5,102,888 (7,247,512) (2,466,288) (3,437,173) (2,144,624) 1,292,549 (24,868,633) (26,566,201) (799,655) 25,766,546 28,555,396 28,555,396 28,555,396 $ 3,686,763 $ 1,989,195 $ 27,755,741 $ 25,766,546 33 34 Proprietary Fund Financial Statements Major Funds Water and Sewer Fund This fund accounts for the City’s water and sewer utility operations. Sanitation Fund This fund is used to account for the activities of the City’s sanitation operations. Stadium Fund This fund is used to account for the activities of the City’s stadium operations. Non-Major Funds Internal Service Fund This fund accounts for operations that provide services to other departments of the government on a cost-reimbursement basis. The internal service fund is presented as one column of the proprietary fund financial statement. The internal service fund activities are reported as governmental activities on the government-wide statements. The city has two internal service funds. Fleet Management Fund This is the City’s only internal service fund which provides preventative maintenance, repairs and safety inspections for City vehicles and equipment. Health Insurance Fund This fund is used for the City’s wellness initiative and to build up a reserve for the City to become self-funding. 35 36 CITY OF GOODYEAR, ARIZONA STATEMENT OF NET ASSETS PROPRIETARY FUNDS June 30, 2011 Business-type Activities-Enterprise Funds ASSETS Current assets: Cash and cash equivalents Investments Interest receivable Accounts receivable Due from other governments Due from other funds Inventories Total current assets Noncurrent assets: Deferred charges Restricted cash and cash equivalents Non-depreciable capital assets Depreciable capital assets Total noncurrent assets Total assets LIABILITIES Current liabilities: Accounts payable Accrued payroll and employee benefits Accrued interest payable Due to other funds Deposits held for others Unearned revenue Liabilities payable from restricted assets Compensated absences payable Total current liabilities Noncurrent liabilities: Accrued interest payable Compensated absences payable Advances from other funds Loan payable Bonds payable Revenue bonds payable Deferred amount on refunding Total noncurrent liabilities Total liabilities NET ASSETS Invested in capital assets, net of related debt Restricted Capital projects Debt service Unrestricted Total net assets See accompanying notes. Water & Sewer $ 6,334,601 2,464,588 16,861 2,439,647 319,067 43,243 623,100 12,241,107 Sanitation $ 1,494,410 796,573 279,722 963 662,567 1,739,825 - Stadium $ 551,589 320,537 2,454 23,268 897,848 Total $ 7,682,763 3,064,847 20,278 3,125,482 319,067 43,243 623,100 14,878,780 989,525 2,483,935 Governmental Activities Internal Service Funds $ 56,949 1,167 156,402 214,518 - 12,394,742 94,117,897 190,947,169 298,954,218 311,195,325 613,626 613,626 2,353,451 8,131,508 10,804,290 114,469,135 134,394,458 135,292,306 20,526,250 104,922,187 306,029,930 433,962,302 448,841,082 214,518 1,053,598 324,167 234,245 1,612,010 52,858 51,935 583,412 816,581 264,955 11,939 - 33,070 2,683,144 8,263 33,184 96,944 3,266,556 824,844 298,139 9,980 93,714 57,966 8,360,080 214,518 8,360,080 - 105,636 11,236,197 23,643 359,749 1,187,390 - 53,315 3,045,221 - 182,594 14,641,167 1,187,390 - 167,728 12,554,096 82,915,204 32,245,000 (234,722) 128,834,696 140,070,893 48,294 48,294 408,043 65,274 961,840 8,489,795 103,714,411 113,231,320 116,276,541 281,296 961,840 12,554,096 91,404,999 135,959,411 (234,722) 242,114,310 256,755,477 161,027,729 613,626 17,613,574 179,254,929 - 2,661,924 7,434,779 $ 171,124,432 1,331,782 1,945,408 905,313 496,878 $ 19,015,765 905,313 2,661,924 9,263,439 $ 192,085,605 - $ 214,518 $ 37 CITY OF GOODYEAR, ARIZONA STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS Year Ended June 30, 2011 Business-type Activities-Enterprise Funds Water & Sewer Operating revenues: Charges for service Miscellaneous Total operating revenue Operating expenses: Administration Costs of sales and services Depreciation and amortization Total operating expenses Operating income (loss) $ 17,634,821 636,957 18,271,778 Sanitation $ 5,774,010 406 5,774,416 Stadium $ Total Governmental Activities Internal Service Funds 1,564,324 1,248 1,565,572 $ 24,973,155 638,611 25,611,766 2,035,161 1,492,052 2,652,025 6,179,238 5,846,384 11,323,035 8,299,025 25,468,444 565,036 1,151,055 1,716,091 143,322 614,240 3,159,924 5,805,439 5,508,529 14,473,892 651,299 4,025,544 138,471 4,815,314 3,797,886 959,102 (4,613,666) $ 2,216,091 114,240 2,330,331 Nonoperating revenues (expenses): Investment income Interest expense Total nonoperating revenues (expenses) 52,779 (6,260,040) 2,021 - 17,019 (5,779,624) 71,819 (12,039,664) 1,858 - (6,207,261) 2,021 (5,762,605) (11,967,845) 1,858 Income (loss) before capital contributions and transfers (2,409,375) 961,123 (10,376,271) (11,824,523) 616,098 6,086,856 - 4,570,849 7,540,940 (4,150,000) (941,535) (4,289,415) (3,862,734) (325,437) Capital contributions Transfers in Transfers out Change in net assets Net assets, beginning of year Net assets, end of year See accompanying notes. 4,570,849 1,454,084 (3,100,000) (1,050,000) 515,558 (88,877) 170,608,874 $171,124,432 $ 2,034,285 23,305,180 195,948,339 1,945,408 $ 19,015,765 $192,085,605 325,437 $ - 38 CITY OF GOODYEAR, ARIZONA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS Year Ended June 30, 2011 Sanitation Stadium Total Governmental Activities Internal Service Funds $ 5,935,669 (4,048,132) (672,233) $ 1,550,819 (1,374,761) (2,066,484) $ 25,536,037 (10,530,018) (6,000,801) $ 2,394,325 (1,137,420) (584,550) Business-type Activities Enterprise Funds Water & Sewer Cash flows from operating activities: Received from customers $ 18,049,549 Payments to vendors (5,107,125) Payments to employees (3,262,084) Net cash provided (used) by operating activities Cash flows from noncapital financing activities: Interfund transfers Net cash provided (used) for noncapital and related financing activities Cash flows from capital and related financing activities: Acquisition and construction of capital assets Capital debt proceeds Principal paid on long-term debt Interest paid on long-term debt Development impact fees received Net cash (used) for capital and related financing activities 9,680,340 1,215,304 (1,890,426) 9,005,218 672,355 (1,645,916) (1,050,000) 6,086,856 3,390,940 (941,535) (1,645,916) (1,050,000) 6,086,856 3,390,940 (941,535) (128,568) (333,334) (5,799,424) (9,765,359) 18,973,534 (13,113,333) (11,831,106) - 2,767,849 - (12,968,415) - (9,636,791) 18,973,534 (12,779,999) (6,031,682) - 2,767,849 - (6,707,089) - (6,261,326) Cash flows from investing activities: Investment income received 35,931 1,058 14,641 51,630 691 Net cash provided by investing activities 35,931 1,058 14,641 51,630 691 Net change in cash and cash equivalents 1,363,266 166,362 (2,050,255) Cash and cash equivalents, beginning of year 19,830,665 909,933 11,053,889 31,794,487 Cash and cash equivalents, end of year $ 21,193,931 $ 1,076,295 $ 9,003,634 $ 31,273,860 $ 56,949 $ 6,334,601 2,464,588 $ $ 551,589 320,537 $ 7,682,763 3,064,847 $ 56,949 12,394,742 $ 21,193,931 $ 1,076,295 8,131,508 $ 9,003,634 20,526,250 $ 31,273,860 $ 56,949 Cash and cash equivalents Investments Restricted cash and cash equivalents See accompanying notes. 796,573 279,722 (520,627) (268,489) 325,438 39 CITY OF GOODYEAR, ARIZONA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS Year Ended June 30, 2011 Business-type Activities-Enterprise Funds Water & Sewer Sanitation Stadium Total Governmental Activities Internal Service Funds Reconciliation of operating income (loss) to net cash provided (used) by operating activities Operating income (loss) Adjustment to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation and amortization (Increase) decrease in: Accounts receivable Inventories Increase (decrease) in: Accounts payable Accrued payroll and employee benefits Due to other funds Unearned revenue Deposits held for others Compensated absences payable Net cash provided (used) by operating activities Noncash investing, capital, and financing activities: Contributions of capital assets Amortization of bond premium Amortization of deferred bond costs See accompanying notes. $ 3,797,886 5,508,529 $ 959,102 138,471 $ (4,613,666) 2,652,025 $ 143,322 $ 8,299,025 614,240 - (319,931) (20,571) 161,253 - (16,935) - (175,613) (20,571) (36,914) 727,821 (22,588) 117,291 822,524 50,549 (118,126) (8,936) (15,097) 112,799 15,966 (25,010) 4,076 (55,477) (1,482) 3,664 24,154 (198,613) (8,936) (16,579) 116,463 44,196 (19,514) 6,028 57,966 - $ 9,680,340 $ 1,215,304 $ (1,890,426) $ 9,005,218 $ 672,355 1,803,000 58,539 - 67,317 1,803,000 125,856 - 257,516 - 47,517 305,033 - 40 Fiduciary Fund Financial Statements Pension Trust Fund This fund is used to account for the City’s Volunteer Firefighter’s Relief and Pension Fund, a defined contribution plan for which the assets are held by the City in a trustee capacity. The Pension Trust Fund is reported using the accrual basis of accounting. Agency Funds The City holds these assets as an agent for individuals, private organizations or others in a temporary custodial capacity. The City currently maintains five agency funds. One fund accounts for monies held in trust for the United States Environmental Protection Agency and the Crane Co. for cleanup of the Phoenix-Goodyear Airport Superfund site known as the Brownfield EPA Cleanup. The remaining four funds account for monies donated by individuals for GAIN, Fill-A-Need, Payshare, and Shop With A Cop. 41 42 CITY OF GOODYEAR, ARIZONA STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS June 30, 2011 Pension Trust ASSETS Cash and cash equivalents Interest receivable Total assets $ LIABILITIES Accounts payable Deposits held for others Due to other funds Total liabilities NET ASSETS Held in trust for pension benefits See accompanying notes. 442,105 109 442,214 - $ Agency Funds $ $ 708,618 6 708,624 74,627 590,754 43,243 708,624 442,214 43 CITY OF GOODYEAR, ARIZONA STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS PENSION TRUST FUND Year Ended June 30, 2011 Pension Trust ADDITIONS Investment income Net increase (decrease) in fair value of investments Interest Total investment income Total additions $ DEDUCTIONS Benefits Total deductions 1,995 1,995 Net increase Net assets, beginning of year Net assets, end of year See accompanying notes. 74,074 224 74,298 74,298 72,303 $ 369,911 442,214 44 Notes to the Financial Statements 45 46 Notes to the Financial Statements __________________________ _______________________ The notes to the basic financial statements include a summary of significant accounting policies and other disclosures considered necessary for a clear understanding of the accompanying financial statements. Note Page 1. Summary of Significant Accounting Policies 49 2. Cash and Investment 56 3. Receivables 60 4. Capital Assets 61 5. Loans Payable 62 6. Contract Payable 63 7. General Obligation Bonds Payable 63 8. Revenue Bonds Payable 65 9. Community Facilities Districts Bonds Payable 66 10. Amortization of Bond Costs 68 11. Changes in Long-Term Liabilities 69 12. Interfund Receivables, Payables, and Transfers 69 13. Contingent Liabilities 70 14. Risk Management 70 15. Retirement Plans 71 16. Deficit Fund Balance 75 17. Commitments 76 18. Subsequent Event 76 47 48 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2011 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial statements of the City of Goodyear, Arizona (City) have been prepared in conformity with accounting principles generally accepted in the United States of America as applied to government units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. A. Reporting Entity The City is a municipal entity governed by an elected Mayor and council. As required by accounting principles generally accepted in the United States of America, these financial statements present the City and its component units, entities for which the City is considered financially accountable. Blended component units, although legally separate entities, are in substance, part of the City’s operations and so data from these units are combined with data from the City, the primary government. The financial reporting entity consists of a primary government, and its component units. The City is a primary government that has a separately elected governing body, is legally separate, and is fiscally independent of other state or local governments. Furthermore, component units are combined with the City for financial statement presentation purposes, and are not included in any other governmental reporting entity. Consequently, the City’s financial statements include the funds of those organizational entities for which its elected governing body is financially accountable. Blended Component Units - The Goodyear Community Facilities General District No. 1, Goodyear Community Facilities Utilities District No. 1, Wildflower Ranch Community Facilities General District No. 1, Wildflower Ranch Community Facilities General District No. 2, Estrella Mountain Ranch Community Facilities District, Cottonflower Community Facilities District, Centerra Community Facilities District, Cortina Community Facilities District, Palm Valley Community Facilities District No. 3, and King Ranch Community Facilities District were formed for the purpose of acquiring and improving public infrastructure in specified land areas. As special purpose districts and separate political subdivisions under the Arizona Constitution, the Districts can levy taxes and issue bonds independently of the City. Property owners in the designated areas are assessed for District taxes and thus for the cost of operating the Districts. The City Council serves as the Board of Directors; however, the City has no liability for the Districts’ debt. For financial reporting purposes, transactions of the Districts are combined together and included as if they were part of the City’s operations. Complete financial statements for each of the individual component units may be obtained at the entities administrative offices. B. Government-Wide and Fund Financial Statements The government-wide financial statements (i.e. the statement of net assets and the statement of activities) present financial information about the City as a whole. Generally, the effect of interfund activity has been removed from the government-wide financial statements. Net interfund activity and balances between the governmental activities and the business-type activities are shown in the government-wide financial statements. The “doubling up” effect of internal service fund activity has been removed from the government-wide statements with the expenses shown in the various functions on the Statement of Activities. These statements are to distinguish between the governmental and business-type activities of the City. Governmental activities normally are supported by taxes and intergovernmental revenues, and are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. 49 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2011 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes, state-shared revenues, investment income and other items not included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. C. Fund Balances – Governmental Funds As of June 30, 2011, fund balances of the governmental funds are classified as follows: Nonspendable - amounts that cannot be spent either because they are in nonspendable form or because they are legally or contractually required to be maintained intact. Restricted - amounts that can be spent only for specific purposes because of constitutional provisions or enabling legislation or because of constraints that are externally imposed by creditors, grantors, contributors, or the laws or regulations of other governments. Committed - amounts that can be used only for specific purposes determined by a formal action of City Council. City Council is the highest level of decision-making authority for the City. Commitments may be established, modified, or rescinded only through ordinances or resolutions approved by City Council. Assigned - amounts that do not meet the criteria to be classified as restricted or committed but that are intended to be used for specific purposes. Under the City’s adopted policy, only City Council or the City’s Finance Director may assign amounts for specific purposes. Unassigned - all other spendable amounts. The General Fund has Unassigned Funds consisting of a Stabilization Arrangement in the amount of $13.1 million. The Stabilization Arrangement is used to set aside resources to cover unanticipated deficits or revenue reductions that may be caused by adverse economic conditions or public emergency. The amount of the Stabilization Arrangement is equal to 4 months of operating expenditures which is estimated from the prior year’s budgeted expenditures. When an expenditure is incurred for purposes for which both restricted and unassigned fund balance is available, the City considers restricted funds to have been spent first. When an expenditure is incurred for which committed, assigned, or unassigned fund balances are available, the City considers amounts to have been spent first out of committed funds, then assigned funds, and finally unassigned funds, as needed, unless City Council or the City’s Finance Director has provided otherwise in its commitment or assignment actions. 50 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2011 NOTE 1 D. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Measurement Focus, Basis of Accounting, and Financial Statement Presentation Government-wide Financial Statements - The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenues as soon as all eligibility requirements imposed by the grantor or provider have been met. As a general rule, the effect on internal activity has been eliminated from the government-wide financial statements. Fund Financial Statements - Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt services expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Property taxes, sales taxes, franchise taxes, licenses and permits, charges for service, special assessments and investment income associated with the current fiscal period are considered to be susceptible to accrual and have been recognized as revenues of the current fiscal period. Grants and similar awards are recognized as revenues as soon as all eligibility requirements imposed by the grantor or provider have been met. Miscellaneous revenue is not susceptible to accrual because generally they are not measurable until received in cash. Deferred revenues also arise when the City receives resources before it has legal claim to them, as when grant monies are received prior to meeting all eligibility requirements imposed by the provider. Delinquent property taxes have been recorded as deferred revenue. Receivables that will not be collected within the available period have also been reported as deferred revenue on the governmental fund financial statements. The City reports the following major governmental funds: General Fund - This fund is the general operating fund of the City. It accounts for all financial resources of the City, except those required to be accounted for in other funds. Community Facilities Districts - Debt Service Fund - This fund accounts for the debt portion of the City’s Community Facilities Districts, which are component units that provide general infrastructure and capital assets for the property within each District’s boundaries. McDowell Road Commercial Corridor Improvement Debt Service Fund - This fund accounts for the debt portion of the McDowell Road Improvements. Non-Utility Development Impact Fees Fund - This fund collects fees to defray the costs of development of infrastructure. 51 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2011 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) The City reports the following major proprietary funds: Water and Sewer Fund - This fund accounts for the City’s water and sewer utility operations. Sanitation Fund - This fund is used to account for the activities of the City’s sanitation operations. Stadium Fund - This fund is used to account for the activities of the City’s stadium operations. The City reports the following internal service funds: Fleet Management Fund – This fund accounts for activities that provide preventative maintenance, repairs and safety inspections for City vehicles and equipment. Health Insurance Fund – This fund is used for the City’s wellness initiative and to build up a reserve for the City to become self funding. The Internal service fund activities are reported as governmental activities on the government-wide statements. Fiduciary funds account for assets held by the City in a trustee or agency capacity on behalf of others. The reporting focus is upon net assets and changes in net assets and employs accounting principles similar to proprietary funds. Fiduciary funds are not included in the government-wide financial statements since they are not assets of the City available to support City programs. The City maintains the following fiduciary funds: Pension Trust Fund – This fund is used to account for the Goodyear Volunteer and Reserve Firefighter Retirement Trust Plan Fund, a defined contribution plan for which the assets are held by the City in a trustee capacity. The Pension Trust Fund is reported using the accrual basis of accounting. Agency Funds – The City holds these assets as an agent for individuals, private organizations or others in a temporary custodial capacity. The City currently maintains five agency funds. One fund accounts for monies held in trust for the United States Environmental Protection Agency and the Crane Co. for cleanup of the Phoenix-Goodyear Airport Superfund site known as the Brownfield EPA Cleanup. The remaining four funds account for monies donated by individuals for the GAIN, Payshare (Utility Assistance), Fill-ANeed, and Shop With A Cop activities. Pursuant to GASB Statement No. 20, Accounting and Financial Reporting for Proprietary Funds and Other Governmental Entities that use Proprietary Fund Accounting, the City follows GASB guidance as applicable to its proprietary funds, and Financial Accounting Standards Boards Statements and Interpretations, Accounting Principles Board Opinions, and Accounting Research Bulletins issued on or before November 30, 1989 that do not conflict with or contradict GASB Pronouncements. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the City’s enterprise funds are charges to customers for water, wastewater, and sanitation services. Operating expenses for these funds include the administrative expenses, cost of sales and services, and depreciation. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. 52 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2011 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, and then unrestricted resources, as they are needed. The focus of governmental fund financial statements is on major funds rather than reporting funds by type. Each major fund is presented in a separate column. Non-major funds are aggregated and presented in a single column. The City’s non-major funds are as follows: Special Revenue Funds Highway User Revenue Fund (HURF) Grants Fund Community Facilities Districts Capital Projects Funds Capital Improvement Projects McDowell Road Commercial Corridor Improvement District Debt Service Funds E. Cash and Cash Equivalents Cash represents amounts in demand deposits and amounts held in trust by financial institutions. The funds held in trust are available to the City upon demand. Cash equivalents are defined as short-term (original maturities of three months or less), highly liquid investments that are 1) readily convertible to known amounts of cash and 2) so near maturity that they present insignificant risk of changes in value because of changes in interest rates. The City has no formal policy relating to custodial credit risk for deposits. F. Investments Arizona Revised Statutes (ARS) authorize the City to invest public monies in the State Treasurer’s Local Government Investment Pool, interest-bearing savings account, certificates of deposit, and repurchase agreements in eligible depositories; bonds or other obligations of the U.S. government that are guaranteed as to principal and interest by the U.S. government; and bonds of the State of Arizona counties, cities, school districts, and special districts as specified by statute. Investments for the City are reported at fair value. Government Accounting Standards Board Statement 40 – Deposit and Investment Risk Disclosures (Statement 40) requires the City to disclose its deposit and investment policies regarding certain types of risks. The City’s adopted investment policy is in compliance with Statement 40. G. Receivables and Payables Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either “due to/from other funds” (i.e., the current portion of interfund loans) or “advances to/from other funds” (i.e., the noncurrent portion of the interfund loans). All trade and property tax receivables are shown net of allowance for uncollectibles. Trade accounts receivable in excess of 180 days comprise the trade accounts receivables allowance for uncollectibles. 53 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2011 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Property taxes are levied by the City and collected by the Maricopa County Treasurer. Property taxes are levied no later than the third Monday in August and are payable in two installments due October 1 of the current year and March 1 of the subsequent year. Taxes become delinquent after the first business day of November and May, respectively. Interest attaches on installments after the delinquent date. Pursuant to ARS, a lien against assessed real and personal property attaches on the first day of January preceding assessment and levy; however according to case law, an enforceable legal claim to the asset does not arise. H. Inventory Inventories are stated at average cost using the first-in, first-out (FIFO) flow assumption in determining cost. Inventory in the governmental funds, which consists of expendable supplies held for consumption, is recorded as an expenditure at the time individual inventory items are consumed (i.e. the consumption method) and is offset by a fund balance reserve in the governmental fund financial statements indicating it does not constitute available expendable resources. No reservation in shown in the proprietary funds statements or the governmentwide financial statements for inventories. I. Prepaid Items Prepaid items are generally for payments made by the City in the current fiscal year for goods or services to be received in a subsequent fiscal year. Such items recorded as prepaid at the time of the payment and recognized as expenditures/expenses when the related goods or services are received. Prepaid items are offset by fund balance reserve in the governmental fund financial statements indicating it does not constitute available expendable resources. No reservation is shown in the proprietary fund statements or the government-wide financial statements for prepaid items. J. Restricted Assets Certain proceeds of the City’s bonds, as well as certain resources set aside for their repayment, are classified as restricted cash and investments on the balance sheet because their use is limited by applicable bond covenants. K. Capital Assets Capital assets, which include land, land improvements, artwork, right of way, streetscape, buildings and improvements, vehicles, machinery, equipment, construction in progress, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. The City defines capital assets as assets with an initial, individual cost of $5,000 or more and an estimated useful life of more than one year. Such assets are recorded at historical cost or estimated fair market value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets’ lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed. 54 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2011 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Certain capital assets of the City are depreciated using the straight-line method over the following estimated useful lives: Assets Infrastructure Land improvements Buildings and improvements Vehicles, machinery and equipment Water rights Years 20-65 15 7-50 3-7 100 The City has a collection of artwork presented both in buildings and public outdoor spaces. The true value of the art is expected to either be maintained at cost or appreciate over time, and thus, the art is not depreciated. If individual pieces are lost or destroyed, the loss is recorded. L. Compensated Absences The City’s employee vacation and sick leave policies provide for granting vacation and sick leave with pay. Sick leave and vacation benefits vest at the employee’s current rate of pay. The current and long-term liabilities for accumulated vacation and sick leave are reported on the government-wide financial statements and in the proprietary fund financial statements. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee leave, resignation and retirements. Resources from the General Fund are generally used to liquidate the governmental funds liabilities compensated absences. M. Long-term Obligations In the government-wide financial statements and proprietary fund financial statements, longterm debt and other long-term obligations are reported as liabilities in the statement of net assets. N. Interfund Activity Flows of cash from one fund to another without a requirement for repayment are reported as interfund transfers. Interfund transfers between governmental funds are eliminated in the Statement of Activities. Interfund services provided and used are not eliminated in the process of consolidation. Interfund transfers in the fund statements are reported as other financing sources/uses in governmental funds and after nonoperating revenues/expenses in proprietary funds. O. Estimates The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates. P. Budgetary Data According to the laws of the State of Arizona, all operating budgets must be approved by their governing board on or before the second Monday in August to allow sufficient time for legal announcements and hearings required for the adoption of the property tax levy on the third Monday in August. 55 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2011 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) In April, the proposed budget for the following fiscal year is presented by the City Manager to the City Council. The budget includes proposed expenditures and the means of financing them. Public meetings are held to obtain citizen comment. Prior to June 30, the City Council legally enacts the budget, through the passage of an ordinance. The ordinance sets the limit for expenditures for the year, within the voter mandated state expenditure limitation. Additional expenditures may be authorized if directly necessitated by a natural or man-made disaster as prescribed in the state constitution. There were no supplemental appropriations made during fiscal year 2011. The maximum legal expenditure permitted for the year is the total budget as adopted. All funds of the City have legally adopted budgets. The initial budget for the fiscal year may be amended during the year in a legally permissible manner. The City adopts the budget by departments for the General Fund and by fund for all others. The City Manager is generally authorized to transfer budgeted amounts within any specific department’s expenditure appropriation. Any budget revisions requiring a transfer between departments in the General Fund or a transfer between any other fund must be approved by the City Council. All unencumbered expenditure appropriations expire at the end of the fiscal year. Encumbered amounts are re-budgeted in the following year as deemed appropriate and necessary after review by the Budget Office. Budgetary carry forwards are approved by the City Council. The City approves its annual budget consistent with Generally Accepted Accounting Principles (GAAP). GAAP requires that budgetary comparison statements for the General Fund and major governmental funds be presented in the annual financial statements. These statements must display original budget, amended budget and actual results (on a budgetary basis).The City has also shown this information as supplementary schedules for other nonmajor governmental funds as well as enterprise funds. NOTE 2 CASH AND INVESTMENTS At June 30, 2011, cash and cash equivalents are presented as follows: Cash and cash equivalents Investments Restricted cash and cash equivalents Governmental Activities $ 27,152,112 21,064,279 $ 19,950,419 $ 68,166,810 Business Activities 7,682,763 3,064,847 Fiduciary Fund $ 750,121 400,602 20,526,250 $ 31,273,860 $ 1,150,723 $ Total 35,584,996 24,529,728 40,476,669 $ 100,591,393 The restricted cash and cash equivalents are proceeds from debt issuances that are held in trustee accounts for the purpose of major capital improvements. 56 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2011 NOTE 2 CASH AND INVESTMENTS (Continued) Deposits At June 30, 2011, the City had $6,250 of cash on hand. The carrying amount of the City’s cash in bank totaled $1,727,725 and the bank balance was $402,497. The City’s deposits at June 30, 2011 were covered by Federal Depository Insurance to the extent of $402,497. There were no deposits that were uncollateralized at year end. Deposits of $2,828,453 were held in a sweep account, which purchases investments nightly. Investments The City’s portfolio complies with Arizona Revised Statutes (ARS) and the City’s investment policy. ARS authorizes the City to invest public monies in the State Treasurer’s Local Government Investment Pool, interest-bearing savings accounts, certificates of deposit, and repurchase agreements in eligible depositories; bonds or other obligations of the U.S. government that are guaranteed as to principal and interest by the U.S. government; and bonds of the State of Arizona counties, cities, school districts, and special districts as specified by statute. The City invests in the Local Government Investment Pool 5 (LGIP), an investment pool managed by the State Treasurer’s Office that allows governments within the State to pool their funds for investment purposes. The LGIP is not registered with the Securities Exchange Commission under the 1940 Investment Advisors Act. The State Board of Investment has oversight responsibilities of the investment pool in accordance with ARS 35-311. The pool’s policy is to invest in fixed-rate securities with a final maturity less than 36 months from the settlement date of the purchase and variable-rate securities with final maturity less than 5 years. The dollar weighted average portfolio maturity is less than 240 days. The net asset value per share of the pool at June 30, 2011 was $1.00. The Arizona State Treasurer issues a publicly available financial report that includes financial statements and required supplementary information. Copies may be obtained by contacting the Arizona State Treasurer, 1700 West Washington, Phoenix, Arizona 85007. Funds held in the State Treasurer’s Local Government Investment Pool represent a proportionate interest in the pool’s portfolio; however, the City’s portion is not identified with specific investments and is not subject to custodial credit risk. At June 30, 2011, the City’s funds invested with the State Treasurer totaled $42,872,641. Custodial Credit Risk To control custodial credit risk, State law and the City’s investment policy requires all securities and collateral to be held by an independent third party custodian in the City’s name. The custodian provides the City with monthly market values. The City is invested in multiple mutual funds through the trust department of Wells Fargo. The mutual funds have a value of $28,655,326 at June 30, 2011. The City also holds $26,960,398 invested with Bank of New York. The accounts are invested in a money market fund, U.S. Treasury securities, and U.S. Government bonds. The City also holds investments that belong to the Goodyear Volunteer and Reserve Firefighter Retirement Trust Plan. These funds are held by LGIP as described above and LPL Financial and consist of multiple money market funds and mutual funds. The maturities of these investments are usually less than 30 days. The Fiduciary Fund investments have a value of $369,053 at June 30, 2011. 57 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2011 NOTE 2 CASH AND INVESTMENTS (Continued) Interest Rate Risk Interest rate risk is the risk of changes in market interest rates that will adversely affect the fair value of an investment. In order to limit interest rate and market risk, State law and the City’s investment policy sets a maximum maturity on any investment to five years. In addition, the City shall adopt an average portfolio duration limitation (ranging from 90 days to 3 years) consistent with the primary investment objective of safety, liquidity and yield. The City’s investment in the State of Arizona’s local government investment pool is stated at fair value which also approximates the value of the investment upon withdrawal. At June 30, 2011, the City’s investments included the following: Remaining Maturity (In Years) Investment Type Less Than 1 Total 1 to 2 Not Applicable 2 to 3 Governmental funds Repurchase Agreement LGIP Money Market Funds Federal Agency Securities U.S. Treasuries $ 2,828,453 34,516,882 13,599,244 7,232,163 13,782,133 71,958,876 $ 2,828,453 34,516,882 13,599,244 3,908,870 54,853,449 $ 827,242 9,873,263 10,700,505 $ 6,404,921 6,404,921 $ - Proprietary funds LGIP Money Market Funds Federal Agency Securities U.S. Treasuries Fiduciary Fund LGIP Money Market Funds U.S. Treasuries Mutual Funds Total 8,317,642 14,435,638 2,013,529 3,837,126 28,603,934 8,317,642 14,435,638 1,088,281 23,841,561 38,117 722,105 31,549 331,290 1,123,061 $ 38,117 684,342 31,549 754,008 $ 101,685,871 $ 79,449,018 230,315 2,748,845 2,979,160 1,783,214 1,783,214 $ 13,679,665 - $ 8,188,135 37,763 331,290 369,053 $ 369,053 At June 30, 2011, 78.13% of the City’s investments have a maturity of less than one year and 8.05% have maturity between two and three years. All other investments have maturities of less than one year. 58 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2011 NOTE 2 CASH AND INVESTMENTS (Continued) Credit Risk Credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the actual rating as of year-end for each investment type. Governmental funds Investment Type Repurchase agreements LGIP Money market Federal Agency Securities U.S. Treasuries $ $ Total 2,828,453 34,516,882 13,599,244 7,232,163 13,782,133 71,958,876 $ $ Ratings as of Year-End AAA Unrated $ 2,828,453 34,516,882 13,599,244 7,232,163 13,782,133 69,130,423 $ 2,828,453 Proprietary funds Ratings as of Year-End Investment Type LGIP Money market Federal Agency Securities U.S. Treasuries $ $ Total 8,317,642 14,435,638 2,013,529 3,837,126 28,603,934 $ $ AAA 8,317,642 14,435,638 2,013,529 3,837,126 28,603,934 Fiduciary funds Unrated $ - $ Ratings as of Year-End Investment Type LGIP Money market U.S. Treasuries Mutual funds $ $ Total 38,117 722,105 31,549 331,290 1,123,061 $ $ AAA 38,117 684,342 31,549 754,008 Unrated $ $ 37,763 331,290 369,053 Subsequent to June 30, 2011, Standard & Poor’s downgraded the rating of U.S. Government securities to AA+. Concentration of Credit Risk The City’s investment policy limits the diversification on both security types and length of maturity. At the time of purchase a maximum of 5% of the market value of the portfolio may be invested in debt issues by any single entity. Debt backed by the U.S. Treasury or Government Sponsored Enterprises (GSEs) are exempt from this concentration criterion. As of June 30, 2011, the City’s investments are included as follows: Total Investment Type Repurchase Agreement LGIP Money Market Funds Federal Agency Securities U.S. Treasuries Mutual Funds Total $ 2,828,453 42,872,641 28,756,987 9,245,692 17,650,808 331,290 $ 101,685,871 Concentration 2.78% 42.16% 28.28% 9.09% 17.36% 0.33% 59 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2011 NOTE 3 RECEIVABLES Receivables, net of no allowance for uncollectibles, as of year-end for the City’s individual major governmental funds and nonmajor governmental funds in the aggregate are as follows: General Receivables: Fund Taxes $ 5,305,121 Interest 39,231 Accounts 1,076,889 Special assessments Total receivables $ 6,421,241 Community Facilities DistrictsDebt Service Fund $ 135,580 - McDowell Road Commercial Corridor Improvement District Debt Service $ - 21,444,548 $ 21,580,128 $ 44,900,000 44,900,000 Non-Utility Development Non-Major Impact Fees Governmental Fund Fund Total $ $ 582,022 $ 6,022,723 32,355 71,586 69 1,076,958 $ 32,355 $ 582,091 66,344,548 $ 73,515,815 The following table summarizes the City’s receivables for the enterprise funds as of June 30, 2011. Receivables: Interest Accounts Less: Allowance Net receivables Water and Sewer Fund $ 16,861 2,500,015 2,516,876 Sanitation Fund $ 963 695,575 696,538 Stadium Fund $ 2,454 23,268 25,722 Total $ 20,278 3,218,858 3,239,136 (60,368) $ 2,456,508 (33,008) $ 663,530 $ 25,722 (93,376) $ 3,145,760 Revenues of the Water and Sewer Fund and Sanitation Fund are reported net of uncollectible amounts. Total uncollectible amounts related to water and sewer revenues of the current period are $105,545. 60 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2011 NOTE 4 CAPITAL ASSETS A summary of capital assets activity for the fiscal year ended June 30, 2011 follows: Governmental Activities Capital assets, not being depreciated: Land Artwork Construction in progress Right of Way Streetscape Total capital assets not being depreciated Capital assets, being depreciated: Land improvements Infrastructure Buildings and improvements Vehicles, furniture and equipment Total capital assets being depreciated Less accumulated depreciation for: Land improvements Infrastructure Buildings and improvements Vehicles, furniture and equipment Total accumulated depreciation Total capital assets, being depreciated, net Governmental activities capital assets, net Business-Type Activities Capital assets, not being depreciated: Land Artwork Construction in progress Total capital assets not being depreciated Capital assets, being depreciated: Infrastructure Buildings & improvements Vehicles, machinery and equipment Water rights Total capital assets being depreciated Less accumulated depreciation for: Infrastructure Buildings and improvements Vehicles, machinery and equipment Water rights amortization Total accumulated depreciation Total capital assets, being depreciated, net Business-Type activities capital assets, net Beginning Balance $ 19,426,644 13,835,364 90,128,522 8,749,608 Increases $ $ (6,856,161) - $ 19,426,644 186,900 10,682,780 90,128,522 8,755,008 132,140,138 3,895,877 (6,856,161) 129,179,854 327,219,553 126,195,907 36,746,403 490,161,863 2,549,608 8,114,805 4,311,812 1,821,761 16,797,986 (1,542,574) (1,542,574) 2,549,608 335,334,358 130,507,719 37,025,590 505,417,275 (56,198,903) (9,250,187) (24,815,422) (90,264,512) (92,069) (7,717,276) (4,702,863) (2,304,411) (14,816,619) 1,542,574 (92,069) (63,916,179) (12,410,476) (27,119,833) (103,538,557) 399,897,351 1,981,367 $ 532,037,489 $ Beginning Balance $ 186,900 3,703,577 5,400 Ending Balance Decreases 14,754,260 90,159,417 5,877,244 1,542,574 $ Increases $ 75,800 8,031,479 (6,856,161) 401,878,718 $ 531,058,572 Ending Balance Decreases $ (8,098,769) $ 14,754,260 75,800 90,092,127 104,913,677 8,107,279 (8,098,769) 104,922,187 175,930,891 134,833,924 14,587,039 18,381,098 343,732,952 9,389,758 657,908 151,824 161,126 10,360,616 (363,811) (363,811) 185,320,649 135,491,832 14,375,052 18,542,224 353,729,757 (26,545,692) (2,000,186) (8,935,332) (2,283,403) (39,764,613) (3,924,506) (3,515,862) (676,265) (182,392) (8,299,025) 363,811 363,811 (30,470,198) (5,516,048) (9,247,786) (2,465,795) (47,699,827) 303,968,339 2,061,591 $ 408,882,016 $ 10,168,870 $ (8,098,769) 306,029,930 $ 410,952,117 61 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2011 NOTE 4 CAPITAL ASSETS (Continued) Depreciation expense was charged to functions/programs as follows: Governmental activities: General government Public safety Highway and streets Culture and recreation Public works Total depreciation expense Business-type activities: Water and wastewater Sanitation Stadium Total depreciation and amortization expense NOTE 5 $ 1,061,813 1,549,198 8,088,510 291,696 3,825,402 $ 14,816,619 $ 5,508,529 138,471 2,652,025 $ 8,299,025 LOANS PAYABLE The City received three loans from the Water Infrastructure Finance Authority. The first loan was used to acquire the rights and make improvements to existing capacity in the wastewater treatment plant. The second loan was used to finance the planning and design of a pilot recharge project and to construct a well distribution line. The third loan is being used for expansion of an effluent sewer facility and to rehabilitate the existing effluent lift station. The loans payable at June 30, 2011, are as follows: Description Business-type activities: Water Infrastructure Finance Authority Loan Water Infrastructure Finance Authority Loan Water Infrastructure Finance Authority Loan Total Business-type activities Interest Rate (Including Fees) Maturity 4.06% 07/01/07 - 21 4.06% 07/01/07 - 21 2.00% 07/01/10 - 29 Outstanding Principal June 30, 2011 $ 2,636,248 Due Within One Year $ 5,033,199 $ 4,884,649 12,554,096 - $ - Annual debt service requirements to maturity on the loans payable at June 30, 2011 are summarized as follows: Fiscal year ending June 30, 2012 2013 2014 2015 2016 2017-2021 2022-2026 2027-2030 Total Business-Type Activities Principal Interest $ $ 197,682 879,026 380,046 909,661 348,839 941,439 316,468 974,404 282,888 5,411,343 864,994 2,452,029 159,240 986,194 14,026 $12,554,096 $ 2,564,183 62 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2011 NOTE 6 CONTRACT PAYABLE The City entered into an agreement to acquire approximately 80,443 acres of right-of-way for proposed 303 alignment for $11,755,628. The City agreed to pay the owner an initial payment of $2,000,000 in fiscal year 2008 and to make annual principal only payments to the owner each fiscal year until the contract is paid off. The contract payable as of June 30, 2011, is summarized below: Fiscal Year Ending Business-Type Activities Principal June 30, 2012 2013 $ $ NOTE 7 Interest 2,000,000 1,755,628 3,755,628 $ - $ GENERAL OBLIGATION BONDS PAYABLE Bonds payable at June 30, 2011, consisted of the outstanding general obligation and refunding bonds presented below. The bonds are generally callable with interest payable semiannually. Of the total amounts originally authorized, $167,660,449 remains unissued. The bonds payable at June 30, 2011 are presented below. Description Governmental activities: General Obligation Bonds Series 2002 General Obligation Bonds Series 2003 General Obligation Bonds Series 2007 General Obligation Bonds Series 2008 General Obligation Refunding Bonds Series 2009 General Obligation Bonds Series 2010 - Build America Total Governmental activities Business-type activities: General Obligation Bonds Series 2005 General Obligation Bonds Series 2007 General Obligation Bonds Series 2008 General Obligation Refunding Bonds Series 2009 General Obligation Bonds Series 2010 - Build America General Obligation Refunding Bonds Series 2010 Total Business-type activities Total Interest Rate Maturity 3.65 - 4.25% 7/1/07 - 17 3.00 - 4.50% Outstanding Principal June 30, 2011 $ Due Within One Year 5,765,000 - 7/1/08 - 18 7,550,000 - 3.00 - 5.00% 7/1/08 - 26 9,092,569 - 4.25 - 6.00% 7/1/09 - 27 8,241,388 - 5.25 - 5.125% 7/1/27 - 30 604,500 - 5.40 - 6.30% 7/1/21 - 30 $ 105,000 31,358,457 $ - $ 19,985,000 $ - 3.50 - 5.00% 7/1/07 - 20 3.00 - 5.00% 7/1/08 - 26 22,107,431 - 4.25 - 6.00% 7/1/09 - 27 33,733,612 - 5.25 - 5.125% 7/1/27 - 30 4,975,500 - 5.40 - 6.30% 7/1/21 - 30 5,710,000 - 4.018 - 5.125% 7/1/22 - 30 $ 4,610,000 91,121,543 $ - $ 122,480,000 $ - 63 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2011 NOTE 7 GENERAL OBLIGATION BONDS PAYABLE (Continued) Annual debt service requirements to maturity on governmental bonds payable at June 30, 2011 are summarized as follows: Fiscal year ending June 30, 2012 2013 2014 2015 2016 2017-2021 2022-2026 2027-2031 2032-2036 2037-2038 Total Governmental Activities Principal Interest $ $ 692,846 2,357,821 1,338,100 2,545,067 1,239,522 2,651,833 1,134,061 2,783,415 1,020,438 9,963,246 3,426,297 5,273,104 1,916,221 3,113,742 853,057 1,811,240 382,281 858,989 37,027 $31,358,457 $12,039,850 Business-Type Activities Principal Interest $ $ 2,186,932 1,727,179 4,082,845 4,009,933 3,910,138 4,143,167 3,726,952 4,331,585 3,531,948 26,141,754 14,341,688 20,166,896 8,878,461 19,671,258 4,278,985 7,413,760 1,564,750 3,516,011 151,567 $91,121,543 $46,654,266 In May 2009, the City issued $5,580,000 of General Obligation Bonds to do advance and current refunding of the 1998-2008 series bonds. Under the terms of the refunding issue, sufficient assets to pay all principal interest on the refunded bonds issues have been placed in irrevocable trust accounts at commercial banks and invested in U.S. Government Securities, which, together with interest earned thereon, will provide amounts sufficient for future payment of principal and interest of the issue refunded. There was $1,875,000 outstanding on these bonds as of June 30, 2011. The $76,619 deferred amount on retirement bonds is being amortized over the lives of the refunding bonds on the straight-line basis. The City issued $5,815,000 General Obligation Bonds 2010 (Build America Bonds – Direct Pay) in January 2010 to acquire and construct certain sewer system and street improvements. $5,710,000 will be repaid from sewer rates and $105,000 will be repaid from excise taxes. The bonds have a stated interest rate 5.40 % - 6.30% with semi-annual interest payable for the next 20 years and principal payable over the last eleven years. The City issued $4,610,000 of General Obligation Refunding Bonds in June 2010 to do advance and current refunding of the 2002-2008 series general obligation bonds. Under the terms of the refunding issue, sufficient assets to pay all principal interest on the refunding bonds issues have been placed in irrevocable trust accounts at commercial banks and invested in U.S. Government Securities, which together with interest earned thereon, will provide amount sufficient for future payment of principal and interest of the issue refunded. There was $3,450,000 outstanding on these bonds as of June 30, 2011. These bonds have been fully defeased. The transaction resulted in an economic loss (difference between the present value of the debt service on the old and the new bonds) of approximately $385,892 and a nominal loss of approximately $3,235,000. The $340,000 deferred amount on retirement of bonds is being amortized over the lives of the refunding bonds on the straightline basis. 64 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2011 NOTE 8 REVENUE BONDS PAYABLE Revenue bonds payable at June 30, 2011 consisted of the outstanding revenue bonds presented below. The bonds are generally callable with interest payable semiannually. Description Governmental activities: Public Improvement Corporation Municipal Facilities Revenue Bonds, Series 2007B Public Improvement Corporation Municipal Facilities Revenue Bonds, Series 2007C McDowell Road Corridor Improvement District Bonds Outstanding Principal June 30, 2011 Due Within One Year $ 1,705,000 $ 545,000 Interest Rate Maturity 4.00 - 5.00% 7/1/08 - 13 4.00 - 4.50% 7/1/08 - 21 2,805,000 200,000 5.25% 1/1/10 - 32 44,900,000 1,225,000 49,410,000 $1,970,000 Outstanding Principal June 30, 2011 Due Within One Year $ $ Total Governmental Activities Description Interest Rate Business-type activities: Revenue Bonds, Series 1999 4.47 - 6.73% Public Improvement Corporation Municipal Facilities Revenue Bonds, Series 2007A 4.50 - 5.00% Public Improvement Corporation Municipal Facilities Revenue Bonds, Series 2008 5.00 - 6.375% Revenue Bonds, Series 2009 6.75% Revenue Bonds, Series 2010 5.00 - 5.625% Revenue Bonds, Series 2011 $ Maturity 7/1/07 - 18 1,490,000 - 7/1/20 - 32 67,850,000 - 7/1/20 - 32 7/1/2049 7/1/23 - 40 34,450,000 325,000 14,950,000 15,480,000 - Total Business-Type Activities $ 134,545,000 $ - Revenue bond debt service requirements to maturity are as follows: Fiscal Year Ending June 30, 2012 2013 2014 2015 2016 2017-2021 2022-2026 2027-2031 2032-2036 2037-2041 2042-2046 2047-2050 Governmental Activities Principal Interest $ 1,970,000 $ 1,360,050 2,065,000 2,443,338 2,160,000 2,340,163 1,650,000 2,244,375 1,740,000 2,159,102 10,165,000 9,353,750 11,640,000 6,580,325 14,620,000 3,273,374 3,400,000 178,500 $ 49,410,000 $ 29,932,977 Business-Type Activities Principal Interest $ $ 3,692,854 335,000 7,221,931 520,000 7,217,056 510,000 7,224,081 510,000 7,250,881 15,440,000 34,625,591 29,455,000 27,061,922 51,905,000 17,755,135 24,670,000 5,151,043 9,880,000 1,647,775 995,000 137,051 325,000 76,780 $134,545,000 $ 119,062,100 65 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2011 NOTE 9 COMMUNITY FACILITIES DISTRICTS BONDS PAYABLE Community facilities district bonds payable at June 30, 2011 consisted of outstanding general obligation and special assessment bonds. The bonds are generally callable with interest payable semiannually. The community facilities district bonds payable at June 30, 2011, are presented below. Description General District No. 1: G.O. Bonds, Series 1996 (A) G.O. Bonds, Series 1998 G.O. Bonds, Series 2000 G.O. Bonds, Series 2003 Palm Valley: G.O. Bonds, Series 2006 G.O. Bonds, Series 2007 Utilities District No. 1: G.O. Bonds, Series 1998 G.O. Bonds, Series 2000 G.O. Bonds, Series 2003 G.O. Bonds, Series 2005 G.O. Bonds, Series 2005 Refunding G.O. Bonds, Series 2007 Wildflower Ranch General District 1: G.O. Bonds, Series 1997 G.O. Bonds, Series 1998 Wildflower Ranch General District 2: G.O. Bonds, Series 2000 G.O. Bonds, Series 2001 Estrella Mountain Ranch: Assessment Bonds, Series 2001(A) Assessment Bonds, Series 2002 G.O. Bonds, Series 2005 Assessment Bonds, Series 2007(M) G.O. Bonds, Series 2007 Assessment Bonds, Series 2007(G) Cottonflower: G.O. Bonds, Series 2003 G.O. Bonds, Series 2004 Cortina: G.O. Bonds, Series 2005 G.O. Bonds, Series 2006 Centerra: G.O. Bonds, Series 2005 G.O. Bonds, Series 2006 G.O. Bonds, Series 2008 Total Outstanding Principal June 30, 2011 Due Within One Year Interest Rate Maturity 6.5 - 7.0% 4.55 - 5.25% 4.6 - 5.3% 3.3 - 5.75% 07/15/21 07/15/23 07/15/25 07/15/28 4.25 - 5.30% 4.25 - 5.80% 07/15/31 07/15/32 4,100,000 3,725,000 115,000 85,000 4.55 - 5.25% 4.7 - 5.2% 3.3 - 5.75% 3.5 - 4.5% 3.0 - 4.3% 4.00 - 5.00% 07/15/22 07/15/25 07/15/28 07/15/29 07/15/21 07/15/32 3,575,000 6,130,000 7,605,000 7,010,000 1,170,000 22,280,000 240,000 220,000 135,000 190,000 85,000 430,000 5.875 - 6.5% 5.2 - 5.75% 07/15/22 07/15/23 445,000 540,000 25,000 25,000 6.0 - 7.0% 4.5 - 5.9% 07/15/25 07/15/26 565,000 610,000 25,000 25,000 7.88% 7.38% 5.0 - 5.8% 4.65 - 5.80% 4.50 - 6.20% 6.00 - 6.75% 07/01/25 07/01/27 07/15/30 07/01/32 07/15/32 07/01/32 4,812,000 3,573,000 4,460,000 7,262,000 12,205,000 6,610,000 271,000 150,000 120,000 214,000 285,000 158,000 4.1 - 5.7% 3.7 - 6.75% 07/15/28 07/15/28 1,485,000 1,175,000 50,000 40,000 5.0 - 5.7% 5.0 - 5.375% 07/15/29 07/15/31 1,505,000 890,000 50,000 15,000 5.50% 4.75 - 5.15% 4.875-6.625% 07/15/29 07/15/31 07/15/32 2,125,000 590,000 715,000 $ 117,182,000 65,000 5,000 15,000 $ 3,463,000 $ 470,000 1,610,000 4,850,000 5,090,000 $ 30,000 85,000 200,000 110,000 66 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2011 NOTE 9 COMMUNITY FACILITIES DISTRICTS BONDS PAYABLE (Continued) Community Facilities District bonds debt service requirements to maturity are as follows: Fiscal year ending June 30, 2012 2013 2014 2015 2016 2017-2021 2022-2026 2027-2031 2032-2033 Total Governmental Activities Principal Interest $ 3,463,000 $ 6,307,363 3,449,000 6,133,726 3,612,000 5,955,638 3,800,000 5,765,851 3,990,000 5,562,682 23,408,000 24,261,565 29,649,000 16,951,259 32,456,000 8,004,490 13,355,000 745,644 $ 117,182,000 $ 79,688,218 On March 31, 2005, Community Facilities Utilities District #1 issued $1,455,000 of General Obligation Bonds to do an advance refunding of the 1996(B) bonds. The $56,974 deferred amount on retirement of bonds is being amortized over the lives of the refunding bonds on the straight-line basis. Amortization for the year ended June 30, 2011 of $5,180 was taken on the deferred amount. Legal Debt Limit - General Obligation bonded indebtedness for each District cannot exceed 60 percent of the market value of the property in the District after the infrastructure is completed, plus the value of the infrastructure improvements made. 67 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2011 NOTE 10 AMORTIZATION OF BOND COSTS Bond costs are being amortized over the life of the bonds on the straight-line basis. Amortization has been offset against interest expense. A summary of the amortizations are as follows: Beginning Balance Bond Costs: Governmental Activities General Obligation Bonds Series 2007 Series 2008 Series 2009-Refunding Series 2010 - Build America Public Improvement Corporation Series 2007B Series 2007C Improvement District Bonds McDowell Road Community Facilities District Bonds Payable Palm Valley District #3 Series 2006 Palm Valley District #3 Series 2007 Utilities District #1 Series 2005 Utilities District #1 Series 2005 Refunding Utilities District #1 Series 2007 Estrella Mountain Ranch Series 2005 Estrella Mountain Ranch Series 2007 Estrella Mountain Ranch Series 2007(M) Estrella Mountain Ranch Series 2007(G) Centerra Series 2005 Centerra Series 2006 Centerra Series 2008 Cortina Series 2005 Cortina Series 2006 Business-type Activities General Obligation Bonds Series 2005 Series 2007 Series 2008 Series 2009-Refunding Series 2010-Refunding Series 2010 - Build America Public Improvement Corporation Series 2007A Series 2008 Revenue Bonds, Series 1999 Revenue Bonds, Series 2009 Revenue Bonds, Series 2010* Revenue Bonds, Series 2011 $ 76,333 102,442 4,495 8,722 Additions $ - Ending Balance Reductions $ 4,490 5,691 237 447 $ 71,843 96,751 4,258 8,275 21,148 33,876 - 6,048 2,952 15,100 30,924 1,945,185 - 90,251 1,854,934 227,898 213,722 292,814 12,292 666,433 144,481 370,786 366,261 321,688 99,962 65,680 106,191 87,581 110,900 - 10,359 9,292 15,411 1,118 28,975 6,880 16,121 15,924 13,986 5,261 2,985 4,617 4,610 5,040 217,539 204,430 277,403 11,174 637,458 137,601 354,665 350,337 307,702 94,701 62,695 101,574 82,971 105,860 266,582 185,592 434,855 51,899 39,084 104,672 - 24,234 10,917 15,531 2,731 1,954 5,368 242,348 174,675 419,324 49,168 37,130 99,304 32,574 10,751 4,346 2,692 3,449 3,290 702,042 220,402 30,420 18,842 98,578 391,702 368,532 $ 7,512,130 734,616 231,153 34,766 21,534 102,027 $ 7,485,670 394,992 $ 394,992 $ *$402,285 was reclassed to Bond Discount 68 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2011 NOTE 11 CHANGES IN LONG-TERM LIABILITIES Long-term liabilities activity for the year ended June 30, 2011 was as follows: Beginning Balance Governmental activities: Compensated absences General obligation bonds payable Community Facilities District bonds payable Public improvement bonds Revenue bonds payable Contracts payable Premiums Discounts Governmental activities long-term liabilities $ 3,790,807 Additions $ $ 1,660,216 $ 4,080,331 33,601,981 - 2,243,524 31,358,457 122,313,000 5,230,000 46,060,000 5,755,628 2,188,965 (63,251) - 5,131,000 720,000 1,160,000 2,000,000 116,286 (3,329) 117,182,000 4,510,000 44,900,000 3,755,628 2,072,679 (59,922) $ 218,877,130 $ Beginning Balance Business-type activities Compensated absences General obligation bonds payable Public improvement bonds Revenue bonds payable Water rights obligations Loans payable Premiums Discounts* Business-type activities long-term liabilities 1,949,740 Ending Balance Reductions $ 419,694 $ 224,420 15,480,000 3,521,622 (258,880) $ 18,967,162 $ 1,413,913 3,463,000 745,000 1,225,000 - $ 13,027,697 $ 207,799,173 $ 6,846,913 Reductions Ending Balance Due Within One Year Additions 92,753,020 102,300,000 17,040,000 10,314,041 9,925,289 2,471,289 (402,285) $ 234,821,048 1,949,740 Due Within One Year $ 180,224 1,631,476 275,000 10,314,041 892,815 128,013 (15,755) $ 13,405,814 $ 463,890 $ 182,594 91,121,544 102,300,000 32,245,000 12,554,096 2,343,276 (645,410) $ 240,382,396 $ 182,594 * W&S 2010 discount reclassed from Amortizaion of Bond Cost NOTE 12 INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS At June 30, 2011, interfund balances were as follows: Interfund receivables/payable: Fund General Fund Non-Major Funds Water and Sewer Fund Stadium Fund Internal Service Fund Total Receivable Amount $ 4,080,518 43,243 $ 4,123,761 Payable Amount $ $ 3,068,207 961,840 93,714 4,123,761 All interfund borrowing resulted from the borrowing of funds to cover cash deficit. 69 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2011 NOTE 12 INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS (Continued) Interfund transfers: Fund General Fund McDowell Road Commericial Corridor Improvement Debt Service Non-Major Governmental Funds Water and Sewer Fund Sanitation Fund Stadium Fund Internal Service Fund Total Transfers Out $ 7,247,512 Transfers In 5,102,888 3,590,193 3,100,000 1,050,000 941,535 $ 15,929,240 1,382,196 1,903,216 1,454,084 6,086,856 15,929,240 $ All transfers made during the year were to cover operations or debt service as approved during budget development, or were necessary for grant matching purposes. NOTE 13 CONTINGENT LIABILITIES Federal and State grants and loans - The City has received a number of grants and loans from both the Federal and State governments. Although the programs have been audited, not all audits have been approved as of June 30, 2011; however, the City expects no material disallowances of expenditures. Lawsuits - The City is a defendant in various lawsuits. Although the outcome of these lawsuits is not presently determinable, in the opinion of the City’s legal counsel, the resolution of these matters will not have a material adverse effect on the financial condition of the City. NOTE 14 RISK MANAGEMENT The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; and natural disasters. The City’s insurance protection is provided by the Arizona Municipal Risk Retention Pool, of which the City is a participating member. The Arizona Municipal Risk Retention Pool is structured such that member premiums are based on an actuarial review that will provide adequate reserves to allow the pool to meet its expected financial obligations. The pool has authority to assess its members additional premiums should reserve and annual premiums be insufficient to meet the pool’s obligations. The City has no known claims in excess of $250,000 for the fiscal year ending June 30, 2011. The maximum liability for the City for the fiscal year is $500,000 and the deductible is $250,000 per occurrence. The City is insured by the Workers’ Compensation Insurance Fund for potential workerrelated accidents. 70 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2011 NOTE 15 RETIREMENT PLANS All full-time City employees are covered by one of two contributory retirement and pension plans, which are administered by the State of Arizona under State Statute. Plan Description Arizona State Retirement Plan - The Arizona State Retirement System (ASRS) administers a cost-sharing multiple-employer defined benefits pension plan that covers general employees of the City. The ASRS is governed by the Arizona State Retirement System Board according to the provisions of ARS Title 38, Chapter 5, Article 2. Benefits are established by state statute and generally provide retirement, death, long-term disability, survivor, and health insurance premium benefits. ASRS issues a publicly available report that includes financial statements and required supplementary information. The report may be obtained in writing at Arizona State Retirement System, 3300 N. Central Avenue, P.O. Box 33910, Phoenix, Arizona 85067-3910 or by calling (602) 240-2200 or (800) 621-3778. Arizona Public Safety Personnel Retirement System - The Public Safety Personnel Retirement System (PSPRS) is an agent multiple-employer defined benefit pension plan that covers public safety personnel who are regularly assigned hazardous duty as employees of the State of Arizona or one of its political subdivisions. The PSPRS acting as a common investment and administrative agent is governed by a five-member board, known as The Fund Manager, and 167 local boards according to the provisions of ARS Title 38, Chapter 5, Article 4. The City contributes to one PSPRS plan for police and one for firefighters. Benefits are established by state statute and generally provide retirement, death, long-term disability, survivor, and health insurance premium benefits. PSPRS issues a publicly available report that includes financial statements and required supplementary information. The report may be obtained in writing at PSPRS, 3010 E. Camelback Rd., Suite 200, Phoenix, AZ 85016-4416 or by calling (602) 255-5575. Funding Policy Cost-sharing plan – The Arizona State Legislature establishes and may amend active plan members’ and the City’s contribution rates. For the year ended June 30, 2011, active ASRS members were required by statute to contribute at the actuarially determined rate of 9.85% (9.6% retirement and 0.25% long-term disability) of the member’s annual covered payroll and the City was required by statute to contribute at the actuarially determined rate of 9.85% (9.01% retirement, 0.59% for health insurance premium, and 0.25% long-term disability) of the members’ annual covered payroll. The City’s contributions to ASRS for the years ended June 30, 2011, 2010, and 2009 were $1,908,120, $1,793,509, and $1,999,370, respectively. The City contribution for the current and two proceeding years, all of which were equal to the required contributions, were as follows: Years ended June 30, 2011 2010 2009 Retirement $ 1,745,397 1,591,262 1,690,473 Long-term Disability Health Insurance $ 114,293 125,927 203,111 $ 48,430 76,320 105,786 Total $ 1,908,120 1,793,509 1,999,370 71 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2011 NOTE 15 RETIREMENT PLANS (Continued) Agent plans – The Arizona State Legislature establishes and may amend active plan members’ and the City’s contribution rates. For the year ended June 30, 2011, active PSPRS members were required by statute to contribute 7.65% of the members’ annual covered payroll, and the City was required to contribute at the actuarially determined rate of 13.71% (12.82% retirement and 0.89% health insurance premium) of the covered payroll to the Plan for the Police and 10.41% (9.86% retirement and 0.55% health insurance premium) of the covered payroll to the Plan for the Firefighters. Annual Pension Cost The City’s pension cost for the agent June 30, 2011, and related information follows: Contribution Rates: City – retirement City – health insurance premium Plan members Annual pension cost Retirement Health insurance premium Pension contributions made Retirement Health insurance premium Actuarial valuation date Actuarial cost method Actuarial assumptions: Investment rate of return Projected salary increases Includes inflation at cost-of-living adjustment Amortization method Remaining amortization period Asset valuation method Post retirement benefit increases plan for PSPRS – Police 12.82% 0.89% 7.65% $ $ 926,533 64,322 the year ended PSPRS - Fire 9.86% 0.55% 7.65% $ $ 951,747 53,089 $ 926,533 $ 64,322 June 30, 2009 Projected Unit Credit $ 951,747 $ 53,089 June 30, 2009 Projected Unit Credit 8.5% 5.5% - 8.5% 8.5% 5.5% - 8.5% 5.5% Level Percent Closed 27 years underfunded 20 years overfunded 7-year smoothed market Based on Income 5.5% Level Percent Closed 27 years underfunded 20 years overfunded 7-year smoothed market Based on Income 72 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2011 NOTE 15 RETIREMENT PLANS (Continued) Trend Information - Information for the PSPRS plan as of the most recent actuarial valuations follows: Annual Pension Cost (APC) Plan PSPRS - Police - Pension June 30, 2011 June 30, 2010 June 30, 2009 $ PSPRS - Police - Health Insurance June 30, 2011 June 30, 2010 June 30, 2009 PSPRS - Fire - Pension June 30, 2011 June 30, 2010 June 30, 2009 PSPRS - Fire - Health Insurance June 30, 2011 June 30, 2010 June 30, 2009 Percentage of APC Contributed Net Pension Obligation 926,533 527,906 431,404 100.0% 100.0% 100.0% - 64,322 24,191 21,550 100.0% 100.0% 100.0% - 951,747 504,370 313,575 100.0% 100.0% 100.0% - 53,089 17,782 11,591 100.0% 100.0% 100.0% - Schedule of Funding Progress - An analysis of funding progress for each of the agent plans as most recent actuarial valuations; June 30, 2009 reporting period determines the rates for fiscal year 2011. For this valuation, fiscal years prior to 2008 (which were prior to the implementation of GASB Statement Nos. 43 and 45), the pension and health insurance benefit amounts were aggregated. In fiscal year 2008, GASB Statement Nos. 43 and 45 measurements are made and reported, these benefits are disaggregated and reported separately. Actuarial Accrued Liability PSPRS - Goodyear Police Pension Plan: Valuation Date June 30, 2009 2008 2007 Actuarial Value of Assets (a) $12,239,614 9,709,250 8,041,204 Actuarial Accrued Liability (AAL) (b) $ 15,500,586 13,516,877 12,267,389 Unfunded AAL (b-a) $ 3,260,972 3,807,627 4,226,185 Funded Ratio (a/b) 79.0% 71.8% 65.5% Annual Covered Payroll (c) $6,431,412 6,192,247 4,937,043 Unfunded AAL as a Percent of Covered Payroll ([b-a]/c) 50.7% 61.5% 85.6% Funded Ratio (a/b) 0.0% 0.0% 0.0% Annual Covered Payroll (c) $6,431,412 6,192,247 4,937,043 Unfunded AAL as a Percent of Covered Payroll ([b-a]/c) 6.92% 5.76% 7.08% PSPRS - Goodyear Police Health Insurance Plan: Valuation Date June 30, 2009 2008 2007 Actuarial Value of Assets (a) $ - Actuarial Accrued Liability (AAL) (b) $ 445,126 356,659 349,750 Unfunded AAL (b-a) $ 445,126 356,659 349,750 73 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2011 NOTE 15 RETIREMENT PLANS (Continued) PSPRS - Goodyear Fire Pension Plan: Valuation Date June 30, 2009 2008 2007 Actuarial Value of Plan Assets (a) $10,127,059 8,177,938 6,438,344 Actuarial Accrued Liability (AAL) (b) $ 10,391,001 9,616,934 7,852,616 Unfunded AAL (b-a) $ 263,942 1,438,996 1,414,272 Funded Ratio (a/b) 97.5% 85.0% 82.0% Annual Covered Payroll (c) $7,047,317 6,888,845 5,397,930 Unfunded AAL as a Percent of Covered Payroll ([b-a]/c) 3.8% 20.9% 26.2% Funded Ratio (a/b) 0.0% 0.0% 0.0% Annual Covered Payroll (c) $7,047,317 6,888,845 5,397,930 Unfunded AAL as a Percent of Covered Payroll ([b-a]/c) 3.34% 2.69% 3.06% PSPRS - Goodyear Fire Health Insurance Plan: Valuation Date June 30, 2009 2008 2007 Actuarial Value of Plan Assets (a) $ - Actuarial Accrued Liability (AAL) (b) $ 235,582 185,457 164,914 Unfunded AAL (b-a) $ 235,582 185,457 164,914 Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Actuarially determined amounts are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. Annual Required Contribution PSPRS - Goodyear Police Health Insurance Plan: Valuation Date June 30, 2009 2008 2007 Fiscal Year Ended 30-Jun 2011 2010 2009 Normal Cost (a) 0.55% 0.45% 0.53% Actuarial Accrued Liability (b) 0.34% 0.28% 0.33% Total (a+b) 0.89% 0.73% 0.86% Dollar Amount $ 63,709 45,203 53,253 Actuarial Accrued Liability (b) 0.17% 0.13% 0.14% Total (a+b) 0.55% 0.46% 0.51% Dollar Amount $ 43,141 31,689 35,133 PSPRS - Goodyear Fire Health Insurance Plan: Valuation Date June 30, 2009 2008 2007 Fiscal Year Ended 30-Jun 2011 2010 2009 Normal Cost (a) 0.38% 0.33% 0.37% The Health Insurance Subsidy payments reported for valuation year 2009 were $4,819 for the Police plan and no Health Insurance Subsidy payments reported for the Fire plan. 74 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2011 NOTE 15 RETIREMENT PLANS (Continued) Goodyear Volunteer and Reserve Firefighter Retirement Trust Plan - The Goodyear Volunteer and Reserve Firefighter Retirement Trust Plan is a single-employer defined contribution plan, which was approved by the City Council on February 27, 1990, under Arizona Revised Statutes Section 9-981. The authority to establish and amend benefit provisions rests with the City Council. In December 1999, the council revised the pension and benefit program for the part-time firefighters. The City discontinued using part-time firefighters as of December 1, 2005. The assets of the plan are valued annually and the earnings or loss is distributed among the participant’s accounts in the plan. The only expenditures being made from this fund are administration fees, benefit payments, and refunds to those firefighters who leave the service of the Fire Department before becoming eligible for pension benefits. The cost of administering the plan is financed from investment earnings. Retirement with full benefits can be at age fifty-five (55) or twenty years of credited service. This plan was fully vested as of June 30, 2011. As of June 30, 2011, there were 6 eligible employees participating in the plan. The plan is administered by LPL Financial. As of June 30, 2011, the plan’s assets consisted of the following: Cash US Treasuries LGIP Mutual Funds $ $ 41,149 31,549 38,117 331,290 442,105 The plan has never had an actuarial valuation; however, benefits cannot exceed plan assets. The market values of mutual funds are determined from readily available market quotations. The fund uses the accrual basis of accounting. Contributions are recognized when earned; benefits and refunds are expensed when incurred. Separate audited financial statements of this employee benefit plan are not available. NOTE 16 DEFICIT FUND BALANCE Grants Fund Deficit Fund Balance - At June 30, 2011, the Grants Fund contains a deficit fund balance of $2,336,765 in the fund financial statements. Future revenues are expected to cover this deficit. 75 CITY OF GOODYEAR, ARIZONA NOTES TO FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2011 NOTE 17 COMMITMENTS The City has active construction projects as of June 30, 2011. The balances for work not yet complete as of June 30, 2011 were as follows: Jacobs Nesbit Contracting Wood Patel - Cato AJP Electric Logan Simpson Design AMEC Earth & Environmental Tata and Howard Black & Veatch Corp Arrington Watkins Forsite Design Barton Malow Brown & Caldwell Malcolm Pirnie SDB Scott Blue RBF Parsons 3D-1 PCL Constructors Arizona DOT Prime Contracting $ $ 13,637 85,947 63,645 201,099 774 4,510 202,304 7,407 1,322,765 46,553 70,766 120,652 724,677 21,863 4,805 5,043 51,412 4,543,337 306,511 176,614 7,974,321 These commitments are being financed from existing fund balances. NOTE 18 SUBSEQUENT EVENT In November 2011, the City of Goodyear issued $26,810,000 of Municipal Facilities Revenue Refunding bonds, Series 2011 due in annual principal ranging from $85,000 to $5,170,000 plus semi-annual interest ranging from 2.0% to 5.25% through July 1, 2027. The 2011 bond series refunded $27,755,000 of the Municipal Facilities Revenue Refunding Bonds, Series 2007A, 2007C and 2008. 76 Other Supplementary Information COMBINING NON-MAJOR FUND FINANCIAL STATEMENTS 77 78 Non-Major Government Funds Financial Statements Special Revenue Funds • Highway User Revenue Fund (HURF) – Funded through gas and fuel taxes distributed from the State of Arizona. • Grants Fund Based on application to granting agencies by the City and availability of funding by grantors. • Community Facilities Districts – CFD’s represent special districts formed for the purpose of financing the acquisition, construction, operation and maintenance of the public infrastructure benefiting the community. Capital Projects Fund • Capital Improvement Projects Fund – This fund accounts for all acquisition and construction of major capital facilities other than those financed by proprietary funds and the McDowell Road Commercial Corridor District. • McDowell Road Commercial Corridor Improvement District – This fund accounts for all acquisition and construction of major capital on McDowell Road. Debt Service Fund This fund was established for the accumulation of resources and the servicing of long-term debt not being finance by the proprietary funds. Revenues are generated from the general property tax levy sufficient to meet the debt service. 79 CITY OF GOODYEAR, ARIZONA COMBINING BALANCE SHEET NON-MAJOR GOVERNMENTAL FUNDS June 30, 2011 Special Revenue ASSETS Cash and cash equivalents Taxes receivable Accounts receivable Due from other governments Inventories Restricted cash and cash equivalents Total assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Accrued payroll and employee benefits Due to other funds Deferred revenue Total liabilities Fund balances: Nonspendable: Inventories Restricted for: Debt service Highway user funds Community Facilities Districts operations Unassigned Total fund balances Total liabilities and fund balances Highway User Revenue $ 304,244 333,566 289,782 $ 927,592 $ 155,149 $ 1,971 2,564,935 2,566,906 $ Community Facilities Districts 1,101,233 18,901 69 1,120,203 $ 78,210 $ 36,061 Grants $ 19,181 177,566 351,896 2,486,707 2,338,754 4,903,671 289,782 927,592 538,256 9,656 583,973 - 285,914 575,696 $ $ - (2,336,765) (2,336,765) $ 2,566,906 536,230 536,230 $ 1,120,203 80 Capital Projects McDowell Road Commercial Capital Corridor Improvement Improvement District Projects Capital Projects $ $ 663,948 $ 663,948 $ - $ Debt Service 229,555 588,507 $ 818,062 Total Non-Major Governmental Funds $ 1,407,448 582,022 69 2,564,935 289,782 1,252,455 $ 6,096,711 $ $ $ - $ 663,948 663,948 $ - - - - - 663,948 $ - 149,876 149,876 19,181 3,024,963 3,339,800 6,653,364 - 289,782 668,186 668,186 $ 818,062 269,420 668,186 285,914 536,230 (2,336,765) (556,653) $ 6,096,711 81 CITY OF GOODYEAR, ARIZONA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NON-MAJOR GOVERNMENTAL FUNDS Year Ended June 30, 2011 Special Revenue REVENUES Taxes Intergovernmental Charges for services Investment income (loss) Miscellaneous Total revenues Highway User Revenue $ 2,752,001 14,650 219 22,253 2,789,123 EXPENDITURES Current: General government Public safety Highway and streets Public works Culture and recreation Capital outlay Debt service: Principal retirement Interest and debt costs Total expenditures Excess (deficiency) of revenues over (under) expenditures Grants $ 40,000 300,422 7,305 5,400 3,179,137 1,172,707 - 4,325,723 3,532,264 1,172,707 (157,496) - - 1,903,216 - - 366,616 (157,496) Fund balances, beginning of year 209,080 (2,179,269) $ (558,827) 1,903,216 - Net change in fund balances Fund balances, end of year $ 3,735,231 590,492 (1,536,600) OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total other financing sources (uses) 3,374,711 57 3,374,768 Community Facilities Districts 500,470 3,958 109,452 613,880 575,696 $ (2,336,765) (558,827) 1,095,057 $ 536,230 82 Capital Projects McDowell Road Commercial Corridor Capital Improvement Improvement District Projects Capital Projects $ $ - $ $ Debt Service 5,689,937 394 5,690,331 - - - - 2,243,524 1,409,993 3,653,517 - - 2,036,814 Total Non-Major Government Funds $ 6,190,407 6,126,712 14,650 4,628 131,705 12,468,102 - 1,212,707 300,422 3,735,231 7,305 5,400 3,769,629 2,243,524 1,409,993 12,684,211 (216,109) (11,353) (1,382,196) (2,196,644) 1,903,216 (3,590,193) (11,353) (1,382,196) (2,196,644) (1,686,977) (11,353) (1,382,196) (159,830) (1,903,086) 11,353 1,382,196 828,016 1,346,433 - $ - $ 668,186 $ (556,653) 83 84 Fiduciary Fund Financial Statements Combining Statement of Net Assets Statement of Changes in Assets and Liabilities Agency Funds Brownfield EPA Cleanup Gain Payshare (Utility Assistance) Fill-A-Need Shop With A Cop 85 86 CITY OF GOODYEAR, ARIZONA COMBINING STATEMENT OF FIDUCIARY NET ASSETS AGENCY FUNDS June 30, 2011 Brownfield EPA Cleanup ASSETS Cash and cash equivalents $ 684,342 Receivable Total assets $ 684,342 LIABILITIES Accounts payable Deposits held for others Due to other funds Total liabilities $ 56,849 584,250 43,243 $ 684,342 Payshare (Utility Assistance) Fill-A-Need 17,778 17,778 $ $ 17,778 17,778 $ Gain $ $ $ $ 54 6 60 $ - $ $ 60 $ 60 $ Shop With A Cop 3,613 3,613 $ 3,613 3,613 $ $ $ Total 2,831 2,831 $ 708,618 6 $ 708,624 2,831 2,831 $ 74,627 590,754 43,243 $ 708,624 87 CITY OF GOODYEAR, ARIZONA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUNDS Year Ended June 30, 2011 Balance June 30, 2010 Brownfield EPA Cleanup: Assets Cash and cash equivalents Liabilities Accounts payable Deposits held for others Due to other funds Total liabilities GAIN: Assets Cash and cash equivalents Liabilities Accounts payable Payshare (Utility Assistance): Assets Cash and cash equivalents Receivable Total assets Liabilities Deposits held for others Fill-A-Need: Assets Cash and cash equivalents Liabilities Deposits held for others Shop With A COP: Assets Cash and cash equivalents Liabilities Deposits held for others Total - All Agency Funds Assets Cash and cash equivalents Receivables Total assets Liabilities Accounts payable Deposits held for others Due to other funds Total liabilities Additions Deletions Balance June 30, 2011 $ 864,022 $ - $ (179,680) $ 684,342 $ $ $ (245,465) (245,465) $ $ 56,849 8,936 65,785 $ $ 829,715 34,307 864,022 $ 56,849 584,250 43,243 684,342 $ 21,230 $ - $ (3,452) $ 17,778 $ 21,230 * $ - $ (3,452) $ 17,778 $ $ $ - $ 54 6 60 $ $ $ - $ 54 6 60 $ - $ 60 $ - $ 60 $ 2,858 $ 755 $ - $ 3,613 $ 2,858 $ 755 $ - $ 3,613 $ 1,302 $ 1,529 $ - $ 2,831 $ 1,302 $ 1,529 $ - $ 2,831 $ 889,412 889,412 $ $ (183,132) (183,132) $ $ 2,338 6 2,344 708,618 6 708,624 21,230 * $ 833,875 * 34,307 889,412 $ 56,849 2,344 8,936 68,129 $ (3,452) (245,465) (248,917) $ $ $ $ $ $ $ $ 74,627 590,754 43,243 708,624 * Restated 88 Other Supplementary Information BUDGETARY COMPARISON SCHEDULES MAJOR GOVERNMENTAL FUNDS 89 90 CITY OF GOODYEAR, ARIZONA COMMUNITY FACILITIES DISTRICTS - DEBT SERVICE SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended June 30, 2011 Budgeted Amounts Original REVENUES Taxes Investment income Special assessments Contributions Total revenues EXPENDITURES Debt service Principal retirement Interest and debt costs Total expenditures Excess (deficiency) of revenues over (under) expenditures $ 6,565,209 40,630 6,701,987 3,152,841 16,460,667 8,648,735 8,359,483 17,008,218 (547,551) Final $ Actual Variance with Final Budget Positive (Negative) 6,565,209 40,630 6,701,987 3,152,841 16,460,667 $ 6,713,914 30,683 2,652,049 2,689,754 12,086,400 8,648,735 8,359,483 17,008,218 5,131,000 6,627,707 11,758,707 3,517,735 1,731,776 5,249,511 327,693 875,244 (547,551) $ 148,705 (9,947) (4,049,938) (463,087) (4,374,267) OTHER FINANCING SOURCES (USES) Debt issuance Total other financing sources (uses) 1,950,000 1,950,000 - (1,950,000) 1,950,000 1,950,000 - (1,950,000) Net change in fund balance 1,402,449 1,402,449 327,693 14,091,308 14,091,308 14,091,308 $ 15,493,757 $ 15,493,757 $ 14,419,001 Fund balance, beginning of year Fund balance, end of year (1,074,756) $ (1,074,756) 91 CITY OF GOODYEAR, ARIZONA MCDOWELL ROAD COMMERCIAL CORRIDOR IMPROVEMENT DISTRICT DEBT SERVICE SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended June 30, 2011 Budgeted Amounts Original REVENUES Investment income Special assessments Total revenues $ EXPENDITURES Debt service Principal retirement Interest and debt costs Total expenditures Final 3,547,700 3,547,700 $ 1,160,000 2,387,700 3,547,700 Actual 3,547,700 3,547,700 $ 1,160,000 2,387,700 3,547,700 16,747 2,207,700 2,224,447 Variance with Final Budget Positive (Negative) $ 1,160,000 2,393,197 3,553,197 16,747 (1,340,000) (1,323,253) (5,497) (5,497) Excess (deficiency) of revenues over (under) expenditures - - (1,328,750) (1,328,750) OTHER FINANCING SOURCES Transfers in Total other financing sources - - 1,382,196 1,382,196 1,382,196 1,382,196 Net change in fund balance - - 53,446 53,446 19,117 19,117 19,117 - Fund balance, beginning of year Fund balance, end of year $ 19,117 $ 19,117 $ 72,563 $ 53,446 92 CITY OF GOODYEAR, ARIZONA NON-UTILITY DEVELOPMENT IMPACT FEES SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended June 30, 2011 Budgeted Amounts Original REVENUES Charges for services Investment income Total revenues $ 3,571,680 248,241 3,819,921 Final $ 3,571,680 248,241 3,819,921 Actual $ 2,501,265 77,024 2,578,289 EXPENDITURES Current: Public works Highway and streets Capital outlay Total expenditures 12,933,561 12,933,561 3,610,868 82,421 9,642,369 13,335,658 Net change in fund balance (9,113,640) (9,515,737) Fund balance, beginning of year 21,327,311 21,327,311 21,327,311 $ 12,213,671 $ 11,811,574 $ 21,992,019 Fund balance, end of year Variance with Final Budget Positive (Negative) $ (1,070,415) (171,217) (1,241,632) 73,097 1,840,484 1,913,581 3,610,868 9,324 7,801,885 11,422,077 664,708 10,180,445 $ 10,180,445 93 94 Other Supplementary Information BUDGETARY COMPARISON SCHEDULES NON-MAJOR GOVERNMENTAL FUNDS AND ENTERPRISE FUNDS 95 96 CITY OF GOODYEAR, ARIZONA HIGHWAY USER REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended June 30, 2011 Budgeted Amounts REVENUES Intergovernmental Charges for services Investment income Miscellaneous Total revenues Original Final Actual $ 2,719,599 1,000 2,720,599 $ 2,719,599 1,000 2,720,599 $ 2,752,001 14,650 219 22,253 2,789,123 3,503,477 600,000 4,103,477 3,705,827 710,528 4,416,355 3,735,231 590,492 4,325,723 (29,404) 120,036 90,632 (1,382,878) (1,695,756) (1,536,600) 159,156 1,200,000 2,170,885 1,903,216 (267,669) 1,200,000 2,170,885 1,903,216 (267,669) (182,878) 475,129 366,616 (108,513) 209,080 209,080 209,080 EXPENDITURES Current Highway and streets Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Transfers in Total other financing sources (uses) Net change in fund balance Fund balance, beginning of year Fund balance, end of year Variance with Final Budget Positive (Negative) $ 26,202 $ 684,209 $ 575,696 $ 32,402 14,650 (781) 22,253 68,524 $ (108,513) 97 CITY OF GOODYEAR, ARIZONA GRANTS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended June 30, 2011 Original Final Actual Variance with Final Budget Positive (Negative) $ 17,237,190 17,237,190 $ 17,237,190 17,237,190 $ 3,374,711 57 3,374,768 $ (13,862,479) 57 (13,862,422) 12,910,762 261,800 47,680 5,400 4,296,428 17,522,070 15,629,480 266,182 47,680 5,400 5,152,446 21,101,188 40,000 300,422 7,305 5,400 3,179,137 3,532,264 15,589,480 (34,240) 40,375 1,973,309 17,568,924 Budgeted Amounts REVENUES Intergovernmental Investment income Total revenues EXPENDITURES Current General government Public safety Public works Culture and recreation Community development Capital outlay Total expenditures Net change in fund balance Fund balance, beginning of year Fund balance, end of year (284,880) (3,863,998) (157,496) (2,179,269) (2,179,269) (2,179,269) $ (2,464,149) $ (6,043,267) $ (2,336,765) 3,706,502 $ 3,706,502 98 CITY OF GOODYEAR, ARIZONA COMMUNITY FACILITIES DISTRICTS - GENERAL SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended June 30, 2011 Variance with Final BudgetPositive (Negative) Budgeted Amounts Original REVENUES Taxes Investment income Miscellaneous Total revenues $ EXPENDITURES Current General government Total expenditures $ 1,636,004 1,636,004 Net change in fund balance 230,203 $ 230,203 $ 306,027 1,095,057 $ 536,230 10,380 1,998 (169,648) (157,270) 463,297 463,297 (558,827) 1,095,057 $ 500,470 3,958 109,452 613,880 1,172,707 1,172,707 (864,854) 1,095,057 $ 490,090 1,960 279,100 771,150 Actual 1,636,004 1,636,004 (864,854) Fund balance, beginning of year Fund balance, end of year 490,090 1,960 279,100 771,150 Final $ 306,027 99 CITY OF GOODYEAR, ARIZONA CAPITAL IMPROVEMENT PROJECTS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended June 30, 2011 Variance with Final Budget Positive (Negative) Budgeted Amounts Original REVENUES Intergovernmental Total revenues $ EXPENDITURES Capital outlay Total expenditures Final 61,209,427 61,209,427 $ 61,209,427 61,209,427 Excess (deficiency) of revenues over (under) expenditures - Actual 61,209,427 61,209,427 $ - $ (61,209,427) (61,209,427) 44,092,169 44,092,169 - 44,092,169 44,092,169 17,117,258 - (17,117,258) OTHER FINANCING SOURCES (USES) Transfers out Total other financing sources (uses) - - (11,353) (11,353) - - (11,353) (11,353) Net change in fund balance - (11,353) (17,128,611) Fund balance, beginning of year Fund balance, end of year 17,117,258 11,353 $ 11,353 11,353 $ 17,128,611 11,353 $ - $ (17,128,611) 100 CITY OF GOODYEAR, ARIZONA MCDOWELL ROAD COMMERCIAL CORRIDOR IMPROVEMENT DISTRICT CAPITAL PROJECTS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended June 30, 2011 Variance with Final Budget Positive (Negative) Budgeted Amounts Original REVENUES Intergovernmental Total revenues $ EXPENDITURES Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Transfers out Total other financing sources (uses) Net change in fund balance $ - $ - $ - 865,105 865,105 - 865,105 865,105 (951,757) (865,105) - 865,105 - - (1,382,196) (1,382,196) - - (1,382,196) (1,382,196) (1,382,196) (517,091) (865,105) 1,382,196 $ Actual 951,757 951,757 (951,757) Fund balance, beginning of year Fund balance, end of year - Final 430,439 1,382,196 $ 517,091 1,382,196 $ - $ (517,091) 101 CITY OF GOODYEAR, ARIZONA DEBT SERVICE SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year Ended June 30, 2011 Budgeted Amounts Original REVENUES Taxes Investment income Total revenues $ Final 5,627,028 5,627,028 $ Actual 5,627,028 5,627,028 $ 5,689,937 394 5,690,331 Variance with Final Budget Positive (Negative) $ 62,909 394 63,303 EXPENDITURES Debt service Principal retirement Interest and debt costs Total expenditures 2,043,750 1,374,712 3,418,462 2,043,750 1,374,712 3,418,462 2,243,524 1,409,993 3,653,517 (199,774) (35,281) (235,055) Excess (deficiency) of revenues over (under) expenditures 2,208,566 2,208,566 2,036,814 (171,752) OTHER FINANCING SOURCES Transfers out Total other financing sources (2,208,566) (2,208,566) (2,208,566) (2,208,566) (2,196,644) (2,196,644) 11,922 11,922 Net change in fund balance - Fund balance, beginning of year Fund balance, end of year - 828,016 $ 828,016 (159,830) 828,016 $ 828,016 (159,830) 828,016 $ 668,186 $ (159,830) 102 CITY OF GOODYEAR, ARIZONA WATER & SEWER ENTERPRISE FUND SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL Year Ended June 30, 2011 Original Final Actual Variance with Final Budget Positive (Negative) $ 18,914,140 2,138,824 21,052,964 $ 18,914,140 2,138,824 21,052,964 $ 17,634,821 636,957 18,271,778 $ (1,279,319) (1,501,867) (2,781,186) Operating expenses: Administration Costs of sales and services Depreciation Total operating expenses 3,182,238 26,676,515 29,858,753 3,181,168 29,465,983 32,647,151 3,159,924 5,805,439 5,508,529 14,473,892 21,244 23,660,544 (5,508,529) 18,173,259 Operating income (loss) (8,805,789) (11,594,187) 3,797,886 15,392,073 221,436 (10,048,155) 221,436 (10,048,155) 52,779 (6,260,040) (168,657) 3,788,115 (9,826,719) (9,826,719) (6,207,261) 3,619,458 (18,632,508) (21,420,906) (2,409,375) 19,011,531 Capital contributions Transfers in Transfers out 4,735,055 1,408,168 (2,100,000) 4,735,055 1,408,168 (2,100,000) 4,570,849 1,454,084 (3,100,000) (164,206) 45,916 (1,000,000) Change in net assets (14,589,285) (17,377,683) Net assets, beginning of year 170,608,874 170,608,874 170,608,874 $ 156,019,589 $ 153,231,191 $ 171,124,432 Budgeted Amounts Operating revenues: Charges for service Miscellaneous Total operating revenue Nonoperating revenues (expenses): Investment income Interest expense Total nonoperating revenues (expenses) Income (loss) before capital contributions and transfers Net assets, end of year 515,558 17,893,241 $ 17,893,241 103 CITY OF GOODYEAR, ARIZONA SANITATION ENTERPRISE FUND SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL Year Ended June 30, 2011 Budgeted Amounts Operating revenues: Charges for service Miscellaneous Total operating revenue Operating expenses: Administration Costs of sales and services Depreciation Total operating expenses Operating income (loss) Nonoperating revenues (expenses): Investment income Total nonoperating revenues (expenses) Income (loss) before transfers Transfers out Change in net assets Net assets, beginning of year Net assets, end of year Variance with Final Budget Positive (Negative) Original Final Actual $ 5,510,152 5,510,152 $ 5,510,152 5,510,152 $ 5,774,010 406 5,774,416 712,371 3,847,849 4,560,220 687,371 3,872,849 4,560,220 651,299 4,025,544 138,471 4,815,314 949,932 949,932 959,102 9,170 2,021 2,021 2,021 2,021 961,123 11,191 949,932 949,932 $ 263,858 406 264,264 36,072 (152,695) (138,471) (255,094) (1,000,000) (1,000,000) (1,050,000) (50,000) (50,068) (50,068) (88,877) (38,809) 2,034,285 2,034,285 2,034,285 $ 1,984,217 $ 1,984,217 $ 1,945,408 $ (38,809) 104 CITY OF GOODYEAR, ARIZONA STADIUM ENTERPRISE FUND SCHEDULE OF OPERATIONS - BUDGET AND ACTUAL Year Ended June 30, 2011 Budgeted Amounts Original Operating revenues: Charges for service Miscellaneous Total operating revenue $ 1,757,500 1,757,500 Final $ Actual 1,757,500 1,757,500 $ 1,564,324 1,248 1,565,572 Variance with Final Budget Positive (Negative) $ (193,176) 1,248 (191,928) Operating expenses: Administration Costs of sales and services Depreciation Total operating expenses 1,913,010 9,443,177 250,000 11,606,187 1,993,262 9,773,243 250,000 12,016,505 2,035,161 1,492,052 2,652,025 6,179,238 (41,899) 8,281,191 (2,402,025) 5,837,267 Operating income (loss) (9,848,687) (10,259,005) (4,613,666) 5,645,339 (5,611,436) (5,611,436) (5,611,436) (5,611,436) 17,019 (5,779,624) (5,762,605) (15,460,123) (15,870,441) (10,376,271) 5,494,170 7,466,288 7,466,288 6,086,856 (1,379,432) Change in net assets (7,993,835) (8,404,153) (4,289,415) 4,114,738 Net assets, beginning of year 23,305,180 23,305,180 23,305,180 14,901,027 $ 19,015,765 Nonoperating revenues (expenses): Investment income Interest expense Total nonoperating revenues (expenses) Income (loss) before transfers Transfers in Net assets, end of year $ 15,311,345 $ 17,019 (168,188) (151,169) $ 4,114,738 105 106 Combining Financial Statements INTERNAL SERVICE FUNDS 107 108 CITY OF GOODYEAR, ARIZONA COMBINING STATEMENT OF NET ASSETS INTERNAL SERVICE FUNDS June 30, 2011 Internal Service Funds ASSETS Current assets: Cash and cash equivalents Interest receivable Inventories Fleet Management $ Total assets LIABILITIES Current liabilities: Accounts payable Accrued payroll and employee benefits Due to other funds Unearned revenue Total liabilities NET ASSETS Invested in capital assets, net of related debt Restricted Unrestricted Total net assets $ 56,949 1,167 156,402 Health Insurance $ - Total $ 56,949 1,167 156,402 214,518 - 214,518 52,858 9,980 93,714 57,966 - 52,858 9,980 93,714 57,966 214,518 - 214,518 - $ - $ - 109 CITY OF GOODYEAR, ARIZONA COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS INTERNAL SERVICE FUNDS Year Ended June 30, 2011 Internal Service Funds Fleet Management Operating revenues: Charges for service Miscellaneous Total operating revenue $ Operating expenses: Administration Costs of sales and services Total operating expenses $ 565,036 1,151,055 1,716,091 Operating income (loss) Nonoperating revenues (expenses): Investment income Total nonoperating revenues (expenses) Income (loss) before capital contributions and transfers Transfers out Change in net assets Net assets, beginning of year Net assets, end of year 1,716,091 114,240 1,830,331 Health Insurance $ 500,000 500,000 Total $ - 2,216,091 114,240 2,330,331 565,036 1,151,055 1,716,091 114,240 500,000 614,240 1,250 608 1,858 1,250 608 1,858 115,490 500,608 616,098 (383,225) (558,310) (941,535) (267,735) (57,702) (325,437) 267,735 57,702 325,437 - $ - $ - 110 CITY OF GOODYEAR, ARIZONA COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS Year Ended June 30, 2011 Internal Service Funds Fleet Management Cash flows from operating activities: Received from customers Payments to vendors Payments to employees $ 1,894,325 (1,137,420) (584,550) Health Insurance $ 500,000 - Total $ 2,394,325 (1,137,420) (584,550) Net cash provided by operating activities 172,355 500,000 672,355 Depreciation and amortization related financing activities: Interfund transfers (383,225) (558,310) (941,535) (383,225) (558,310) (941,535) Net cash (used) for noncapital and related financing activities Cash flows from investing activities: Investment income received 83 608 691 Net cash provided by investing activities 83 608 691 Net change in cash and cash equivalents Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year $ (210,787) (57,702) (268,489) 267,736 57,702 325,438 56,949 $ - $ 56,949 111 CITY OF GOODYEAR, ARIZONA COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS Year Ended June 30, 2011 Internal Service Funds Fleet Management Health Insurance Total Reconciliation of operating income to net cash provided by operating activities Operating income $ Adjustment to reconcile operating income to net cash provided by operating activities: (Increase) decrease in: Inventories Increase (decrease) in: Accounts payable benefits Due to other funds Unearned revenue Net cash provided by operating activities $ 114,240 $ 500,000 $ 614,240 (36,914) - (36,914) 50,549 (19,514) 6,028 57,966 - 50,549 (19,514) 6,028 57,966 172,355 $ 500,000 $ 672,355 112 Capital Assets Schedules 113 114 CITY OF GOODYEAR CAPITAL ASSETS USED IN THE OPERATIONS OF GOVERNMENTAL FUNDS SCHEDULE BY SOURCE June 30, 2011 Governmental funds capital assets Land Artwork Right of Way Streetscape Land improvements Buildings and improvements Vehicles, machinery and equipment Infrastructure Construction in progress Total governmental funds capital assets Investment in governmental funds capital assets by source: Government funds Total governmental funds capital assets 2011 $ 19,426,644 186,900 90,128,522 8,755,008 2,549,608 130,507,719 37,025,590 335,334,358 10,682,780 $ 634,597,129 $ 634,597,129 $ 634,597,129 115 CITY OF GOODYEAR CAPITAL ASSETS USED IN THE OPERATIONS OF GOVERNMENTAL FUNDS SCHEDULE BY FUNCTION AND ACTIVITY June 30, 2011 Land Right of Way Streetscape Function and Activity General Government Public Safety Highways and Streets Culture and Recreation Public Works Total governmental funds capital assets $ Artwork Buildings and Improvements 6,184,658 98,883,530 12,493,223 3,298,370 $ 186,900 - $ 18,283,377 813,910 8,651,418 $ 120,859,781 $ 186,900 $ 27,748,705 116 Land Improvements Vehicles, Machinery and Equipment $ $ 159,200 62,073 6,646,487 95,891,254 $ 102,759,015 Infrastructure Construction in Progress Total 8,116,641 17,631,118 1,671,745 9,606,086 $ 335,334,358 - $ 10,557,980 124,800 $ 25,018,479 35,976,568 434,217,888 21,812,266 117,571,928 $ 37,025,590 $ 335,334,358 $ 10,682,780 $ 634,597,129 117 CITY OF GOODYEAR CAPITAL ASSETS USED IN THE OPERATIONS OF GOVERNMENTAL FUNDS SCHEDULE OF CHANGES BY FUNCTION AND ACTIVITY For the fiscal year ended June 30, 2011 Function and Activity Governmental Funds Capital Assets July 1, 2010 General Government Public Safety Highways and Streets Culture and Recreation Public Works $ 24,411,649 35,532,590 426,097,682 21,625,365 114,634,716 $ 3,679,525 1,134,024 8,120,205 186,901 3,413,069 $ (3,072,694) $ 25,018,480 (690,046) 35,976,568 434,217,887 21,812,266 (475,857) 117,571,928 Total governmental funds capital assets $ 622,302,002 $ 16,533,724 $ (4,238,597) $ 634,597,129 Additions Deductions Governmental Funds Capital Assets June 30, 2011 118 Statistical Section 119 120 STATISTICAL SECTION Page Contents Financial Trends (Table 1 - 2) 122 These schedules contain trend information to help the reader understand how the City’s financial performance and well-being have changed over time. Revenue Capacity (Table 3 – 14) 124 These schedules contain information to help the reader assess the City’s most significant local revenue sources, property tax and sales and uses taxes. Debt Capacity (Table 15 – 19) 156 These schedules present information to help the reader assess the affordability of the City’s current levels of outstanding debt and the City’s ability to issue additional debt in the future. Demographic and Economic Statistics (Table 20) 162 These schedules offer economic and demographic indicators to help the reader understand the environment within which the City’s financial activities take place. Operating Information (Table 21 – 24) 163 These schedules contain service and infrastructure data to help the reader understand how the information in the City’s financial report relates to the services the City provides and the activities it performs. Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. 121 City of Goodyear Net Assets by Component Last Nine Fiscal Years (accrual basis of accounting) (Unaudited) Fiscal Year 2011 Governmental Activities Invested in Capital Assets, Net of Related Debt Restricted Unrestricted Total Governmental Activities Net Assets $ 327,503,686 110,105,296 18,249,626 455,858,608 2010 $ 317,162,459 115,881,050 19,272,548 452,316,057 Business-type Activities Invested in Capital Assets, Net of Related Debt Restricted Unrestricted Total Business-type Activities Net Assets 179,254,929 3,567,237 9,263,439 192,085,605 191,582,614 4,365,725 195,948,339 Primary Government Invested in Capital Assets, Net of Related Debt Restricted Unrestricted Total Primary Government Net Assets 506,758,615 113,672,533 27,513,065 647,944,213 508,745,073 115,881,050 23,638,273 648,264,396 $ $ 2009 $ 309,491,989 117,787,315 20,522,420 447,801,724 199,696,564 (11,409,545) 188,287,019 509,188,553 117,787,315 9,112,875 $ 636,088,743 Note: The City implemented GASB 34 for the fiscal year ended June 30, 2003. Prior financial statements have not been restated to provide this information. Source: Statement of Net Assets City financial records and reports 122 Table 1 Fiscal Year 2008 2007 2006 2005 2004 2003 $ 256,047,572 70,835,115 36,122,934 363,005,621 $ 206,294,183 60,388,579 57,992,720 324,675,482 $ 144,405,463 67,199,030 49,858,294 261,462,787 $ 127,120,944 92,391,268 26,380,488 245,892,700 $ 162,387,951 36,249,889 31,059,204 229,697,044 $ 73,017,558 3,058,777 31,801,683 107,878,018 101,366,083 8,166,207 109,532,290 61,259,814 24,329,033 85,588,847 55,662,610 3,498,896 59,161,506 46,277,707 4,850,793 51,128,500 307,660,266 60,388,579 66,158,927 $ 434,207,772 205,665,277 67,199,030 74,187,327 $ 347,051,634 182,783,554 92,391,268 29,879,384 $ 305,054,206 208,665,658 36,249,889 35,909,997 $ 280,825,544 159,530,687 (13,193,174) 146,337,513 415,578,259 70,835,115 22,929,760 $ 509,343,134 40,297,163 335,000 (4,302,180) 36,329,983 113,314,721 3,058,777 27,499,503 $ 143,873,001 123 City of Goodyear Changes in Net Assets Last Nine Fiscal Years (accrual basis of accounting) (Unaudited) Fiscal Year 2011 Expenses Governmental Activities: General Government Police Financial Services Community Services Information Services Fire Municipal Services Human Resources Community Development Culture and Recreation Highways and Streets Public Works Interest on Long-term Debt Total Governmental Activities Expenses Business-type Activities Water Utility Wastewater Utility Sanitation Stadium* Total Business-type Activities Expenses Total Primary Government Net Assets $ 2010 8,366,129 14,788,614 2,866,494 2,710,111 13,243,603 1,442,029 1,822,793 5,150,677 4,439,181 14,798,670 3,658,756 10,710,302 83,997,359 $ 12,454,200 8,279,732 4,815,314 11,958,862 37,508,108 $ $ 121,505,467 $ $ $ 2009 6,469,757 16,050,100 3,190,931 454,550 2,722,449 11,413,558 1,497,249 1,929,973 2,555,353 4,023,639 12,179,531 11,070,853 11,210,504 84,768,447 $ $ $ 10,475,189 7,649,704 4,782,565 11,547,500 34,454,958 $ 11,608,878 7,046,385 5,090,150 6,475,960 30,221,373 $ 119,223,405 $ 123,274,826 $ $ 4,701,916 15,580,923 2,842,884 1,248,219 2,743,877 12,249,685 1,636,533 2,222,189 9,583,326 5,435,750 8,436,341 14,370,096 12,001,714 93,053,453 Note: * Stadium Fund did not have operating activity until 2008 N/A data was not separated in these years. 124 Table 2 Fiscal Year 2007 2008 2006 2005 2004 2003 $ 9,260,326 18,491,397 2,751,164 1,290,021 2,931,295 8,840,019 1,484,507 1,998,317 14,731,322 1,909,303 9,104,717 59,138,044 9,710,526 $ 141,640,958 $ 5,020,742 11,091,150 2,233,303 1,277,245 1,769,833 10,129,091 1,163,005 1,976,324 19,683,385 3,181,071 9,581,333 25,397,680 5,785,031 $ 98,289,192 $ 3,007,708 9,305,303 1,768,327 1,108,528 1,551,418 5,839,807 853,289 1,361,992 6,668,282 2,016,304 13,536,118 1,791,319 5,573,064 $ 54,381,459 $ 4,238,904 7,798,053 2,888,511 1,012,533 1,434,932 7,275,586 981,256 1,276,457 4,613,424 2,591,911 8,007,969 6,398,665 4,567,604 $ 53,085,805 $ 481,277 7,416,958 2,690,132 1,326,811 2,056,194 5,862,554 1,460,026 1,987,100 5,386,786 1,716,362 4,217,554 2,744,892 5,649,175 $ 42,995,822 $ 5,731,101 6,507,095 1,151,840 479,498 1,907,004 4,879,245 811,904 1,525,546 888,182 1,925,726 6,433,665 3,409,198 4,153,359 $ 39,803,363 $ 11,794,505 5,189,053 4,839,626 861,000 $ 22,684,184 $ 10,866,043 4,872,792 4,401,267 $ 20,140,102 $ 9,722,925 4,313,533 3,435,486 $ 17,471,944 $ 15,150,219 N/A 2,588,541 $ 17,738,760 $ 13,696,021 N/A 2,133,917 $ 15,829,938 $ 9,535,629 N/A 1,911,839 $ 11,447,468 $ 164,325,142 $ 118,429,294 $ 71,853,403 $ 70,824,565 $ 58,825,760 $ 51,250,831 continued 125 City of Goodyear Changes in Net Assets Last Nine Fiscal Years (accrual basis of accounting) (Unaudited) Fiscal Year 2011 Program Revenue Governmental Activities: Charges for Services: General Government Fire Police Municipal Services Public Works Culture and recreation Community Development Operating Grants and Contributions Capital Grants and Contributions Total Governmental Activities Program Revenues Business-type Activities Charges for Services: Water Utility Wastewater Utility Sanitation Stadium Operating Grants and Contributions Capital Grants and Contributions Total Business-type Activities Revenues Total Primary Government Revenues Net (Expense)/Revenue Governmental Activities Business-type Activities Total Primary Government Net Revenue $ 2010 1,128,675 500,562 128,109 849,060 325,552 3,879,823 5,818,158 13,951,581 26,581,520 $ $ 9,391,674 8,243,147 5,774,010 1,564,324 4,570,849 29,544,004 $ 9,022,576 7,235,503 5,790,357 1,530,799 6,211,533 29,790,768 $ 8,880,151 6,389,190 5,625,426 1,014,221 25,000 41,595,562 63,529,550 $ 56,125,524 $ 58,152,032 $ 176,830,064 (56,407,183) $ (4,664,190) (61,071,373) $ 20,247,061 33,308,177 53,555,238 $ $ $ $ (57,415,839) $ (7,964,104) (65,379,943) $ 863,192 336,303 320,967 852,500 287,805 3,615,255 5,648,867 16,436,375 28,361,264 2009 $ $ 301,151 24,054 240,293 730,571 357,039 4,776,076 4,843,140 102,028,190 113,300,514 126 Table 2 Fiscal Year 2007 2008 $ 3,988,792 57,630 210,707 686,135 343,274 12,183,231 4,587,630 85,108,447 $ 107,165,846 $ $ $ 8,894,793 6,244,742 5,145,922 762,200 27,405,133 48,452,790 $ 155,618,636 $ $ $ 396,770 54,887 128,040 638,390 3,527,777 272,516 13,241,940 895,854 62,732,783 81,888,957 2006 $ $ 2005 286,419 61,456 67,264 529,007 126,800 14,584,804 648,756 26,761,281 43,065,787 $ $ 2004 133,367 434,179 259,993 10,631,653 523,405 16,472,105 28,454,702 $ 276,990 38,716 8,425 293,355 1,162,624 8,774,894 109,956 46,863,563 $ 57,528,523 2003 $ $ 5,416,791 45,991 35,035 1,454,454 2,195,739 397,092 9,475,823 19,020,925 7,588,225 6,137,152 4,392,794 20,000 24,414,623 42,552,794 $ 5,952,571 4,846,569 3,185,387 240,000 26,016,946 40,241,473 $ 8,895,239 3,775,636 2,786,148 10,853,019 26,310,042 $ 10,525,392 3,631,132 2,335,547 12,702,625 29,194,696 $ 2,334,840 3,729,617 1,939,809 4,813,617 12,817,883 $ 124,441,751 $ 83,307,260 $ 54,764,744 $ 86,723,219 $ 31,838,808 (34,475,112) $ 25,768,606 (8,706,506) $ (16,672,751) $ (11,315,672) $ (24,631,103) $ 14,532,701 22,412,692 22,769,529 8,571,282 13,364,758 5,739,941 $ 11,453,857 $ (16,059,821) $ 27,897,459 $ (20,782,438) 1,370,415 $ (19,412,023) continued 127 City of Goodyear Changes in Net Assets Last Nine Fiscal Years (accrual basis of accounting) (Unaudited) Fiscal Year 2011 Governmental Revenues and Other Changes in Net Assets Governmental Activities: Taxes Intergovernmental Interest and Investment Income Miscellaneous Transfers Total Governmental Activities Business-type Activities Interest and Investment Income Proceeds from the sale of water rights Mitigation proceeds Miscellaneous Transfers Total Business-type Activities Total Primary Government Changes in Net Assets Governmental Activities Business-type Activities Total Primary Government $ $ $ 2010 2009 53,595,119 $ 55,623,884 $ 9,699,146 10,907,518 227,446 179,114 827,619 2,026,285 (7,815,285) (3,390,940) 60,958,390 $ 60,921,516 $ $ 71,819 638,611 3,390,940 4,101,370 $ 65,059,760 $ 73,247,026 $ $ 3,542,551 $ 4,514,333 7,661,320 (3,862,734) (320,183) $ 12,175,653 $ $ $ 59,003,971 12,236,437 148,687 911,254 (7,751,307) 64,549,042 57,527 4,352,000 100,698 7,815,285 $ 12,325,510 $ $ 121,900 78,586 7,751,307 7,951,793 72,500,835 84,796,103 41,259,970 $ 126,056,073 Note:The City implemented GASB 34 for the fiscal year ended June 30, 2003. Prior financial statements have not been restated to provide this information. Source: Statement of Net Assets City financial records and reports 128 Table 2 Fiscal Year 2007 2008 2006 2005 $ 61,251,635 $ 59,428,806 $ 48,726,571 $ 31,498,052 12,654,235 15,053,501 6,997,920 5,973,538 4,268,448 4,723,886 4,436,598 1,079,720 4,075,011 1,029,445 1,486,027 1,641,295 (56,622) (117,062) 634,153 (9,444,077) $ 72,805,252 $ 80,179,016 $ 61,530,054 $ 40,826,758 $ $ $ $ 25,487,392 $ 21,111,029 5,756,754 5,587,983 556,145 (499,021) 408,114 233,858 (799,999) 2,257,938 $ 31,408,406 $ 28,691,787 $ $ 83,841,869 $ 81,709,767 $ 64,329,728 $ 40,288,482 $ 32,396,010 $ 26,668,500 $ 38,330,140 36,375,158 $ 74,705,298 $ 63,505,623 23,943,443 $ 87,449,066 $ 50,214,382 25,569,203 $ 75,783,585 $ 16,195,655 8,033,006 $ 24,228,661 $ 45,941,107 14,352,362 $ 60,293,469 $ $ 715,181 1,950,000 17,431 117,062 2,799,674 2003 1,379,832 212,708 9,444,077 $ 11,036,617 $ 1,447,446 26,683 56,622 1,530,751 2004 $ 88,211 $ 7,666 (634,153) (538,276) $ 119,849 67,756 799,999 987,604 $ $ $ 152,306 82,345 (2,257,938) (2,023,287) 7,909,349 (652,872) 7,256,477 concluded 129 130 Table 3 City of Goodyear Governmental Activities Tax Revenues By Source Last Ten Fiscal Years (accrual basis of accounting) (Unaudited) Fiscal Year Property Taxes 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 $ 18,548,550 21,941,576 22,602,319 18,144,197 12,370,983 9,826,690 8,583,676 7,187,270 5,718,332 2,169,086 Sales & Use Taxes $ 32,729,749 31,448,399 34,205,905 42,045,316 45,240,436 37,420,013 21,747,851 17,342,116 14,610,889 12,243,826 Franchise Taxes $ 2,316,820 2,233,909 2,195,747 2,071,378 1,817,387 1,479,868 1,166,525 958,006 781,808 751,432 State Shared Revenues - not Restricted to Specific Programs State Shared State Revenue Highway User Taxes* Sharing Revenue $ 5,201,107 4,940,934 5,355,676 6,101,593 6,307,272 3,225,710 2,600,534 2,582,196 2,224,251 2,255,263 $ 4,498,039 5,966,584 6,880,761 6,503,557 5,252,405 1,979,970 1,738,442 1,705,193 2,012,719 1,972,442 $ 2,752,001 2,769,619 3,008,499 3,401,589 3,493,824 1,792,240 1,634,562 1,469,365 1,351,013 1,679,426 Source: City financial records and reports * Combined State Shared Sales Tax and Vehicle License Tax 131 City of Goodyear Sales & Use Taxes by Industry Classification Last Ten Fiscal Years (Unaudited) Fiscal Year 2011 Mining & Government Construction Manufacturing Utilities Wholesale Trade Retail Trade Restaurant & Bar Real Estate Hotels Services Miscellaneous $ 5,234 3,251,977 642,255 3,275,325 598,098 12,950,291 4,415,910 3,510,263 764,996 1,771,527 1,055,398 Total* $ 32,241,274 2010 $ 2009 2008 15,141 5,365,079 535,972 3,085,682 540,630 11,569,427 4,161,539 2,692,806 820,902 1,388,178 640,388 $ 11,412 12,779,596 508,454 2,448,686 538,279 9,568,935 3,687,991 2,227,491 854,203 1,176,780 622,042 $ 6,391 17,256,194 451,147 2,397,905 775,843 9,526,853 3,740,867 2,698,200 1,006,334 1,451,721 1,035,306 $ 30,815,744 $ 34,423,869 $ 40,346,762 * Total may differ from Governmental Activities Tax Revenues By Source because of difference in reporting periods. Source: Arizona Department of Revenue North American Industry Code System (NAICS) Summary 132 Table 4 Fiscal Year 2006 2007 $ 2005 1,055 19,305,179 405,882 2,115,344 815,930 9,789,605 3,996,446 2,603,404 944,488 3,725,380 2,286,662 $ 371 15,029,430 600,356 1,640,534 746,566 8,727,607 3,441,051 1,506,238 889,513 643,325 641,428 $ 17,116 8,915,836 301,797 671,037 177,946 6,397,775 2,544,019 1,011,414 719,181 441,333 633,503 $ 45,989,375 $ 33,866,419 $ 21,830,957 2004 $ 16,597 6,918,462 116,997 352,894 92,257 5,393,963 2,087,339 693,762 527,267 483,406 730,151 $ 17,413,095 2003 $ 5,271,160 26,120 403,567 343,762 4,935,805 1,947,312 486,911 500,620 612,169 4,309 $ 14,531,735 2002 $ 4,786,758 34,008 354,844 48,402 4,041,687 1,680,128 461,419 394,327 492,499 11,004 $ 12,305,076 133 City of Goodyear Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (Unaudited) Fiscal Year 2011 General Fund Reserved Unreserved $ 2010 - $ 2009 17,812,619 10,742,777 $ 29,117,875 Nonspendable: Advances to other funds 961,840 Inventories Prepaid items - - 3,627 - - 422,681 - - Restricted by: Charter mandates 3,209,321 - - Court 198,457 - - Law enforcement 129,231 - - IT replacement 407,961 - - Fleet replacement 383,225 - - Assigned to: Risk management insurance Unassigned Total General Fund 558,310 - - 21,481,088 - - $ 27,755,741 $ 28,555,396 $ 29,117,875 $ - $ 14,891,228 1,393,549 47,213 $ 13,597,749 4,110,554 - - 20,452,179 - 23,153,403 1,435,331 289,782 - - 46,238 - - Debt service 15,113,512 - - Development impact fees 21,992,019 - - 285,914 - - - - 36,784,169 $ 42,297,037 All Other Governmental Funds Reserved, Reported in: Debt Service Funds Capital Projects Funds Community Facilities District Unreserved, Reported in: Special Revenue Funds Capital Projects Funds Nonspendable: Inventories Prepaid items Restricted by: Highway user funds Community Facilities Districts operations Unassigned Total All Other Governmental Funds 536,230 (2,336,765) $ 35,926,930 $ Note: The City implemented GASB 54 for fiscal year ended June 30, 2011. Prior financial statements have not been restated to provide this information. Source: Balance Sheet Governmental Funds City financial records and reports 134 Table 5 Fiscal Year 2008 $ 2007 42,219,809 $ - 2006 61,037,128 $ - 2005 53,853,901 $ - 2004 29,393,457 $ - 2003 18,701,153 $ - 2002 12,456,038 $ - 11,904,771 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - $ 42,219,809 $ 61,037,128 $ 53,853,901 $ 29,393,457 $ 18,701,153 $ 12,456,038 $ 11,904,771 $ 15,356,746 10,942,787 - $ $ $ $ $ $ 25,851,665 27,462,037 $ 8,726,046 7,810,178 20,649,813 10,220,953 7,833,170 21,303,978 19,835,781 3,354,296 6,643,132 9,704,731 14,475,469 46,019,494 6,388,963 8,731,725 21,129,201 3,027,055 4,613,137 32,003,402 4,096,549 3,773,232 18,922,708 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 79,613,235 $ 47,406,990 $ 52,327,225 $ 76,842,826 $ 36,249,889 $ 39,643,594 $ 26,792,489 135 City of Goodyear Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (Unaudited) Fiscal Year Revenues Taxes Licenses and permits Intergovernmental Charges for services Rents and royalties Fines and forfeits Investment income Participation by others Special assessments Impact fees Contributions Miscellaneous Total Revenues Expenditures General Government Police Financial Services Community Services Information Services Fire Municipal Services Human Resources Community Development Culture and Recreation Highways and Streets Public Works Debt Service: Principal retirement Interest and debt cost Capital outlay Total Expenditures Excess of Revenues over (under) Expenditures 2011 2010 $ 53,909,300 4,541,951 15,825,858 3,978,325 849,060 225,588 4,859,749 2,707,926 157,090 87,054,847 $ 55,590,530 629,979 16,464,531 7,402,083 846,143 178,715 6,522,924 3,042,851 1,942,018 92,619,774 8,194,510 13,506,835 2,160,642 2,346,507 10,538,180 1,389,266 1,822,793 4,376,985 3,936,203 3,808,328 3,047,742 2009 $ 2008 58,734,426 3,091,729 16,827,730 6,387,350 686,557 148,220 3,065,304 3,403,370 593,684 92,938,370 $ 61,112,204 7,160,922 17,361,565 19,117,473 678,594 4,268,447 2,228,149 8,260,888 4,075,010 124,263,252 6,943,802 13,752,875 2,605,931 2,339,204 10,615,080 1,497,249 1,929,973 4,654,052 3,882,621 4,098,986 3,075,759 3,945,126 14,082,452 4,803,801 1,248,219 2,221,606 11,961,508 1,567,179 2,215,237 9,723,957 4,393,748 5,686,483 3,901,157 5,486,915 13,295,314 4,850,217 1,329,505 2,834,417 11,277,737 1,547,460 1,995,841 9,262,010 4,667,176 3,994,494 4,261,005 11,254,524 10,645,162 9,234,659 86,262,336 10,942,758 11,158,130 13,494,149 90,990,569 7,392,618 11,930,502 47,556,824 132,630,417 5,141,143 10,466,384 135,249,363 215,658,981 792,511 1,629,205 (39,692,047) (91,395,729) 136 Table 6 Fiscal Year 2006 2005 2004 59,346,833 8,905,743 16,456,618 14,921,767 584,316 4,723,886 2,228,646 14,245,039 1,046,124 122,458,972 $ 48,669,770 10,593,032 7,691,531 12,590,311 482,604 4,436,598 2,197,445 1,717,842 1,433,513 89,812,646 $ 31,501,700 7,899,726 6,288,957 9,894,288 364,301 1,079,719 2,580,510 2,401,107 1,641,295 63,651,603 $ 25,507,299 6,785,229 5,811,389 9,057,321 332,046 567,142 1,555,984 1,562,190 600,649 51,779,249 8,637,828 10,262,437 2,209,677 1,255,467 1,622,556 8,842,402 1,102,875 1,973,845 6,028,162 3,431,934 4,756,383 4,294,102 3,871,939 8,674,983 1,550,946 1,190,116 1,593,403 7,332,103 848,612 1,360,762 6,599,788 2,381,569 3,647,507 2,154,782 2,482,603 7,853,958 1,553,016 1,012,533 1,434,932 5,163,911 704,584 1,276,457 6,636,525 2,128,218 2,128,408 1,917,725 3,138,823 6,643,972 1,240,958 787,635 1,138,348 4,529,680 879,352 985,334 5,543,191 1,699,797 1,804,454 2,002,948 4,469,126 6,097,075 1,148,502 189,763 1,907,004 4,879,245 734,689 1,525,546 864,434 1,621,308 2,817,472 2,432,247 3,849,495 5,607,832 1,089,136 122,636 1,129,707 4,385,622 704,381 1,369,745 767,620 1,504,652 3,764,721 2,967,970 4,836,000 5,740,194 71,999,738 136,993,600 3,777,600 5,313,243 14,819,302 65,116,655 5,327,354 5,825,352 10,039,532 55,485,108 2,971,580 4,020,706 40,712,284 78,099,062 3,319,857 3,901,382 11,449,411 47,357,061 2,324,200 3,152,550 15,747,085 48,487,352 (14,534,628) 24,695,991 8,166,495 (26,319,813) (4,167,603) (8,867,154) 2007 $ 2003 2002 $ 21,092,384 $ 17,493,808 3,845,730 2,729,164 5,985,075 8,442,804 5,805,188 1,621,233 18,391 365,136 288,301 (499,021) 861,929 1,842,726 1,654,637 1,446,388 1,946,971 125,211 4,940,329 2,803,272 43,189,458 39,620,198 137 City of Goodyear Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (Unaudited) Fiscal Year 2011 Other Financing Sources and (Uses) Transfer in Transfer out Debt issuance Debt premium Refunding Bonds Payment to refunded bond escrow agent Total Other Financing Sources and (Uses) Net Change in Fund Balances Debt Service as a Percentage of Noncapital Expenditures $ 2010 2009 2008 8,388,300 $ 6,376,290 $ 4,123,384 $ 11,561,671 (10,837,705) (14,191,575) (11,874,691) (21,005,748) 105,000 604,500 112,248,000 5,733 5,722 2,300,192 6,415,000 (3,585,000) (6,734,459) - (2,449,405) (7,704,552) (10,726,085) 104,784,656 $ (1,656,894) $ (6,075,347) $ (50,418,132) $ 13,388,927 28.4% 28.5% 17.5% 10.8% Source: City financial records and reports 138 Table 6 Fiscal Year 2006 2007 2005 2004 2003 2002 $ 17,288,179 $ 18,210,420 $ 2,933,372 $ 2,242,149 $ 8,994,203 $ 7,799,778 (17,387,710) (47,966,568) (2,299,219) (3,042,148) (6,736,265) (5,831,078) 16,969,302 5,005,000 42,005,000 27,050,000 16,010,000 5,078,915 (72,151) 479,593 272,362 2,300,000 - 16,797,620 $ 2,262,992 12.4% (24,751,148) $ 43,118,746 (55,157) $ 51,285,241 17.9% 21.6% 26,250,001 $ 20,840,300 (69,812) $ 14,240,042 18.7% 18.8% 7,047,615 $ (1,819,539) 16.7% 139 140 Table 7 City of Goodyear Governmental Activities Tax Revenues By Source Last Ten Fiscal Years (modified accrual basis of accounting) (Unaudited) Fiscal Year Property Taxes 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 $ 18,862,731 21,908,223 22,332,774 18,004,766 12,289,010 9,769,889 8,583,676 7,187,270 5,718,332 4,460,668 Sales & Use Taxes $ 32,729,749 31,183,096 34,205,906 41,036,060 45,240,436 37,420,013 22,475,427 17,869,383 15,111,509 13,427,467 Franchise Taxes $ 2,316,820 2,233,909 2,195,748 2,071,378 1,817,387 1,479,868 1,166,525 958,006 781,808 751,432 State Shared Revenues - not Restricted for Specific Programs State Shared State Revenue Highway User Sales Sharing Revenue $ 5,201,107 4,940,934 5,355,676 6,101,593 6,307,272 3,225,710 2,600,534 2,582,196 2,224,251 2,255,263 $ 4,498,039 5,966,584 6,880,761 6,503,557 5,252,405 1,979,970 1,738,442 1,705,193 2,012,719 1,972,442 $ 2,752,001 2,769,619 3,008,499 3,401,589 3,493,824 1,792,240 1,634,562 1,469,365 1,351,013 1,679,426 Source: City financial records and reports 141 City of Goodyear Property Tax Rates Direct and Overlapping Governments1 Last Six Fiscal Years (Unaudited) City Direct Rate Overlapping Rates County-Wide Jurisdictions Fiscal Year 2011 2010 2009 2008 2007 2006 Debt Operating Service Rate Rate $ 0.7603 $ 0.6630 0.6320 0.9679 0.6678 0.9322 0.7321 0.8679 0.7945 0.7991 0.8222 0.7778 Total City Rate 1.4233 1.5999 1.6000 1.6000 1.5936 1.6000 County County County County Library Fire District Flood Education Operating District Assistance District Equalization Rate Rate Rate Rate Rate $ 1.0508 $ 0.0412 $ 0.0066 $0.1489 $ 0.3564 0.9909 0.0353 0.0057 0.1367 0.3306 1.0327 0.0353 0.0053 0.1367 1.1046 0.0391 0.0053 0.1533 1.1794 0.0507 0.0068 0.2047 1.1971 0.0521 0.0069 0.2119 0.4358 * = Assessed / Acreage Basis Note: Data not available prior to 2006 1 Source: Maricopa County Assessor's Office 142 Table 8 Overlapping Rates County-Wide Jurisdictions Central Community Arizona Fiscal College Project Rate Year Rate 2011 $ 0.9728 $ 0.1000 2010 0.8844 0.1000 2009 0.9386 0.1000 2008 0.9760 0.1000 2007 1.0646 0.1200 2006 1.0315 0.1200 Special Health Care District Rate $ 0.1122 0.0914 0.0856 0.0935 0.1184 0.1206 School Districts Total Agua Fria/ Agua Fria/ Buckeye/ County Avondale Litchfield Liberty Rate Rate Rate Rate $ 2.7889 $ 5.3923 $ 5.3658 $ 6.1069 2.5750 6.0066 5.3164 5.2568 2.3342 5.7554 4.9382 5.5581 2.4718 6.4298 5.3545 6.7267 2.7446 7.8564 6.8558 7.3005 3.1759 7.8631 6.9430 7.4944 Tolleson/ Littleton Rate $ 6.1935 5.8681 6.3843 6.8078 7.3586 8.3794 Mobile Rate $ 5.4994 6.2147 8.3984 N/A N/A N/A continued 143 City of Goodyear Property Tax Rates Direct and Overlapping Governments1 Last Five Fiscal Years (Unaudited) Overlapping Rates Other Special Taxing Districts Fiscal Year 2011 2010 2009 2008 2007 2006 West Maricopa Education Center District Rate $ 0.5000 0.0500 0.0500 0.0500 0.0500 0.0500 Central Arizona GRD Rate $ 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 Roosevelt Irrigation District Rate* $ 17.1000 17.1000 17.1000 15.0000 15.0000 15.0000 Estrella Centerra Cortina Cottonflower Mtn. Ranch Community Community Community Community Facilities Facilities Facilities Facilities District District District District Rate Rate Rate Rate $ 2.3797 $ 2.2087 $ 2.9776 $ 1.3000 2.6829 1.2146 2.1198 1.3000 2.6965 0.1520 1.2843 1.3000 3.0000 2.8500 1.7639 1.3000 3.0000 2.8500 3.0000 1.3000 3.0000 2.8500 3.0000 1.3000 144 Table 8 Overlapping Rates Fiscal Year 2011 2010 2009 2008 2007 2006 Goodyear Community Facilities General District #1 Rate $ 0.7570 0.6629 0.5313 0.8040 1.0000 1.0000 Other Special Taxing Districts Goodyear Palm King Wildflower Wildflower Community Valley Ranch Community Community Facilities Community Community Facilities Facilities Utilities Facilities Facilities General General District #1 District #3 District District #1 District #2 Rate Rate Rate Rate Rate $ 1.0000 $ 1.2952 $ 0.3000 $ 2.2891 $ 2.5496 1.0000 0.2165 0.3000 1.5905 1.6561 1.0000 1.7949 0.3000 1.1703 1.3143 1.0000 1.6295 0.3000 1.3123 1.4154 1.0000 2.0000 0.3000 2.1340 2.3935 1.0000 0.3000 2.1893 2.3547 concluded 145 146 Table 9 City of Goodyear Principal Property Tax Payers Current Fiscal Year and Eight Years Ago (Unaudited) Fiscal Year 2003 2011 Taxable Assessed Value Taxpayer Arizona Public Service Company $ Percentage of Total Taxable Assessed Rank Value Taxable Assessed Value 21,998,911 1 2.59% $ 7,739,112 VHS of South Phoenix, Inc. 14,589,354 2 1.72% - NNP III Estrella Mountain Ranch, LLC 14,447,700 3 1.70% - Macy's Retail Holdings, Inc. 8,463,230 4 1.00% - Suncor Development Company 8,362,053 5 0.99% First American Title Insurance Company 8,342,423 6 DH Goodyear, LLC 7,254,270 The Market at Estrella Falls, LLC Rank Percentage of Total Taxable Assessed Value 3 3.48% 14,143,894 1 6.36% 0.98% 3,580,451 6 1.61% 7 0.85% 2,246,121 8 1.01% 7,198,390 8 0.85% - Vestar Arizona XL III, LLC 6,619,055 9 0.78% - Meritage Homes of Arizona, Inc. 6,143,253 10 0.72% - Rubbermaind, Inc. - 8,339,560 2 3.75% Sun Chase Estrella LP - 6,560,454 4 2.95% McLane Company - 4,492,243 5 2.02% Qwest Communications - 2,646,420 7 1.19% Byrd Enterprises of Arizona Inc. - 2,068,211 9 0.93% Southwest Gas Corporation - 1,801,345 10 0.81% Total $ 103,418,639 12.18% $ 53,617,811 24.11% Note: Data not available prior to 2003 Source: Maricopa County Treasurer 147 City of Goodyear Assessed Value and Estimated Actual Value of Taxable Property1 Last Six Fiscal Years (Unaudited) Fiscal Year Ended June 30 Total Assessed Value Residential Property 2011 2010 2009 2008 2007 2006 $ 405,850,285 497,383,109 586,181,619 464,968,904 259,063,526 219,161,231 Total Assessed Value Commercial Property $ 297,842,341 284,491,038 211,360,209 159,482,762 131,663,157 109,929,249 Agricultural/ Vacant Land Other Less: Tax-Exempt Property $ 308,078,489 374,640,069 323,172,973 221,884,779 164,267,777 97,388,312 $ 33,349 28,842 30,053 30,978 47,639 226,783 $ 163,045,578 173,686,635 120,023,805 82,130,285 60,129,086 35,549,177 Net Assessed Value $ 848,758,886 982,856,423 1,000,721,049 764,237,138 494,913,013 391,156,398 Note: Data prior to 2006 is not available. Source: Maricopa County Assessor's Office Under Arizona law, there are two property valuations bases: PRIMARY and SECONDARY. The primary (limited) assessed valuation is used when levying for maintenance and operations The secondary (full cash) assessed valuation is used when levying for debt retirement. 148 Table 10 Estimated Actual Taxable Value Secondary Tax Rate $ 0.6630 0.9679 0.9322 0.8679 0.7991 0.7778 $ 7,401,814,203 8,607,745,155 8,799,999,309 6,700,379,823 4,159,221,424 3,254,133,854 Assessed Value as Percentage of Actual Value 11.5% 11.4% 11.4% 11.4% 11.9% 12.0% 149 Table 11 City of Goodyear Property Tax Levies and Collections1 Last Ten Fiscal Years (Unaudited) Fiscal Year Ended June 30 Taxes Levied for the Fiscal Year 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 $ 11,650,452 14,959,898 14,460,290 10,843,797 7,424,246 6,070,318 6,049,416 5,096,682 4,287,085 3,204,131 Collected within the Collection in Fiscal Year of the Levy Percentage Subsequent Amount of Levy Years $ 11,524,990 14,527,751 13,888,743 10,706,881 7,257,013 5,923,200 5,974,482 4,982,963 4,112,585 3,102,195 98.92% 97.11% 96.05% 98.74% 97.75% 97.58% 98.76% 97.77% 95.93% 96.82% $ 123,357 96,134 44,605 77,686 49,075 49,184 51,203 Total Collections to Date Percentage Amount of Levy $ 11,648,347 14,623,885 13,933,348 10,784,567 7,306,088 5,972,384 5,974,482 4,982,963 4,112,585 3,153,398 99.98% 97.75% 96.36% 99.45% 98.41% 98.39% 98.76% 97.77% 95.93% 98.42% Note: Data not availabe for FY2003, FY2004 & FY2005. All secondary collections are reported as current collections. Delinquent tax collections are shown in the year collected. Source: City Financial Records and Reports Schedule includes General and Debt Service Funds 150 Table 12 City of Goodyear Utility Statistical Data Ten Largest Water Users Last Four Fiscal Years (Unaudited) Fiscal Year 2011 2010 Fees & Entity Type of User Rank Charges $ 2009 Fees & Rank Charges $ 2008 Fees & Rank Fees & Charges $ Rank 175,863 Canyon Trails 3 Homeowner's Association 1 194,610 1 197,098 2 Canyon Trails HOA Homeowner's Association 2 188,461 2 189,539 1 197,693 Canyon Trails Unit 4 Homeowner's Association 3 138,598 3 164,577 3 154,868 Avondale School School 4 124,054 7 102,992 8 92,499 6 105,348 Canyon Trails 4 - South Homeowner's Association 5 109,247 4 139,712 4 143,926 2 166,139 Agua Fria High School School 6 103,049 6 104,297 6 113,045 1 173,266 Sarival Paseo Joint Community Homeowner's Association 7 81,057 8 99,371 5 127,107 3 154,195 9 70,677 9 76,401 Park Shadows Apartments 8 76,277 10 67,355 Cottonflower Goodyear Community Homeowner's Association 9 69,994 9 74,265 - Cancer Treatment Center Hospital 10 66,878 - - Centerra, LLC Homeowner's Association - 5 121,117 7 106,752 10 65,138 8 Charges $ 93,896 - 5 145,474 7 102,443 Pueblo Verda HOA Homeowner's Association - - Evergreen Lawn Sprinklers Homeowner's Association - - - 4 148,800 Estrella Vista HOA Homeowner's Association - - - 10 64,527 $ 1,152,225 $ 1,260,323 $ 1,247,568 Total - $ 1,230,489 Total as a percent of total FY2011, FY 2010, FY 2009 & FY 2008 Water System Operating Revenue 12.51% 14.10% 14.00% 13.94% Note: Water information not available prior to FY 2008 Source: City customer service and billing records 151 152 Table 13 City of Goodyear Utility Statistical Data Ten Largest Wastewater Users Last Four Fiscal Years (Unaudited) Fiscal Year 2011 2010 Fees & Entity Type of User Rank Charges $ 2009 Fees & 2008 Fees & Rank Charges Rank Fees & Charges $ Rank Charges Arizona State Prison/Perryville Prison 1 287,556 1 $ 287,556 1 310,582 1 Park Shadows Apartments 2 65,937 2 54,303 2 50,718 2 $ 317,331 Fairfield Development Real Estate 3 59,617 4 42,942 3 37,170 Cancer Treatment Center Hospital 4 58,978 3 48,613 - - Fairfield Centerra Real Estate 5 53,771 6 38,030 - - 50,512 - Poore Brothers, Inc. Food Manufacturer, Snacks 6 43,509 7 31,889 5 29,681 6 22,656 Airport Training Center Airport 7 37,031 5 40,286 4 31,970 5 22,656 Avondale Elementary Education 8 35,052 10 26,585 6 28,237 7 21,794 Pem Investments Real Estate 9 34,657 8 28,887 Alliance Residential Real Estate 10 34,442 9 28,260 - - 9 20,015 - Country Air Apartments Apartments - - Agua Fria Union High School District Education - - 7 25,516 3 32,000 - McLane Sunwest Grocery Distributor - - 8 22,180 8 19,253 10 19,547 4 24,273 Americas Best Value Inn Hotel - - Wal-Mart Stores, Inc. Grocery Retail - - - La Jolla Court, Inc. Apartments - - - 9 18,044 Estrella Joint Committee Homeowner's Association - - - 10 17,581 710,550 $ 627,351 Total $ $ 575,616 - $ 546,100 Total as a percent of total FY 2011, 2010, FY 2009 & FY 2008 Wastewater System Operating Revenue 8.47% 8.81% 9.01% 8.74% Note: Wastewater information not available prior to FY 2008 Source: City customer service and billing records 153 City of Goodyear Schedule of Existing and Adopted Monthly Water & Sewer Service Charges (2011 - 2013) (1) (Unaudited) Description of Water System Services Existing Fees Adopted Adopted Adopted 2011 2012 2013 Base Charge (Meter Size) 3/4 Inch $ 9.69 $ 9.94 $ 10.05 $ 10.23 1 Inch 10.95 11.81 12.74 14.14 1 1/2 Inch 13.56 16.36 19.74 22.86 2 Inches 21.47 26.22 32.02 37.01 3 Inches 38.05 48.43 61.64 70.67 4 Inches 69.78 83.36 99.58 115.24 6 Inches 135.11 159.83 189.08 218.71 Monthly Volume Charge - Residential 0 - 6,000 gallons (per thousand) $ 6,001 - 12,000 (per thousand) 1.27 (2) $ 1.32 2.54 (3) 2.64 $ 2.92 1.46 $ 2.36 1.18 12,001 - 30,000 (per thousand) 3.81 (4) 3.96 4.38 3.54 30,001+ gallons (per thousand) 4.95 5.15 5.69 5.69 Monthly Volume Charge - Commercial 0 - 40,000 gallons (per thousand) $ 1.70 $ 2.30 $ 2.60 $ 3.00 40,001 - 100,000 gallons (per thousand) 2.72 3.68 4.16 4.80 100,001+ gallons (per thousand) 3.54 4.78 5.41 6.24 (1) Rates shown are for inside City customers. Outside City rates are 25% greater than inside City rates. Rate increases were adopted, but are subject to change at the direction of City Council. (2) Monthly volume change for fees is 0 - 8,000 gallons (per thousand). (3) Monthly volume change for fees is 8,000 - 20,000 gallons (per thousand). (2) Monthly volume change for fees is 20,001 - 30,000 gallons (per thousand). Source: City of Goodyear Finance Department. The table above reflects only certain basic fees and charges of the City's water system and is not a comprehensive statement of all such fees. Schedule of Water System Rate Increases (2011-2013) (1) Rate Date Increase Fiscal Year 2011 7.50% Fiscal Year 2012 9.40% Fiscal Year 2013 0.00% (1) Rate increases were adopted, but are subject to change at the discretion of City Council. Source: City of Goodyear Finance Department. 154 Table 14 Description of Sewer System Services Existing Fees Adopted Adopted Adopted 2011 2012 2013 Residential Sewer Service Base Charge (See below) Volume Charge (per 1,000 gallons) $ 4.05 $ 4.45 $ 4.90 $ 5.78 General Commercial Sewer Service Base Charge (See below) Volume Charge (per 1,000 gallons) $ 4.05 $ 4.45 $ 4.90 $ 5.78 $ 16.19 $ 17.52 $ 18.96 $ 21.12 Base Charge (Meter Size) 3/4 Inch 1 Inch 20.05 23.70 28.02 32.41 1 1/2 Inch 25.57 29.75 34.61 39.94 2 Inches 44.34 54.57 67.16 77.58 3 Inches 72.04 84.74 99.68 115.22 4 Inches 122.19 130.37 139.10 152.86 6 Inches 247.06 285.03 328.83 378.70 Schedule of Wastewater System Rate Increases (2011-2013) (1) Rate Date Fiscal Year 2011 Increase 9.30% Fiscal Year 2012 9.50% Fiscal Year 2013 15.20% (1) Rate increases were adopted, but are subject to change at the discretion of City Council. Source: City of Goodyear Finance Department. 155 City of Goodyear Ratios of Outstanding Debt by Type Last Six Fiscal Years (Unaudited) Fiscal Year Ended June 30 2011 2010 2009 2008 2007 2006 Note: General Obligation Bonds Contract Payable Governmental Activities Public Greater Improvement McDowell Arizona Corporation Road Development Municipal Corridor Authority Facilities Improvement Loan Revenue Bond District $ 31,358,457 $ 3,755,628 $ 33,601,981 5,755,628 35,842,739 11,755,628 41,719,857 36,050,000 3,185,000 27,280,000 3,645,000 $ Community Facilities District Bonds 4,510,000 $ 44,900,000 $ 117,182,000 5,230,000 46,060,000 122,313,000 5,910,000 47,165,000 127,125,000 6,415,000 47,165,000 131,116,000 3,320,000 76,844,000 3,485,000 73,000,000 Data prior to 2006 is not available. Source: City Financial Records and Reports 156 Table 15 General Obligation Bonds Business-Type Activities Public Improvement Corporation Municipal Facilities Revenue Revenue Bond Bonds Water Infrastructure Finance Authority Loan Water Rights Total $ 91,121,543 $ 102,300,000 $ 32,245,000 $ 12,554,096 $ - $ 439,926,724 92,753,019 102,300,000 17,040,000 9,925,289 10,314,041 445,292,958 88,282,261 102,300,000 2,370,000 8,866,108 11,173,544 440,790,280 88,125,143 67,850,000 2,345,000 9,443,400 394,179,400 54,145,000 2,460,000 9,985,012 185,989,012 28,990,000 2,580,000 10,505,512 149,485,512 Percentage of Personal Income Per Capita 20.66% $ 6,609 24.92% 6,858 24.89% 7,047 25.65% 6,742 12.34% 3,335 11.74% 3,007 157 Table 16 City of Goodyear Ratios of General Bonded Debt Outstanding Last Ten Fiscal Years (Unaudited) Fiscal Year Ended June 30 General Obligation Bonds 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 $ 122,480,000 126,355,000 124,125,000 129,845,000 90,195,000 56,270,000 58,265,000 30,395,000 22,270,000 11,210,000 Less: Amounts Available in Debt Service Fund $ 668,186 828,016 592,244 3,026,753 587,476 210,498 123,863 499 - Total $ 121,811,814 125,526,984 123,532,756 126,818,247 89,607,524 56,059,502 58,141,137 30,394,501 22,270,000 11,210,000 Percentage Estimated Actual Taxable Value of Property 11.47% 11.40% 11.40% 11.40% 12.00% 12.00% 17.77% 11.49% 10.01% 6.43% Per Capita $ 1,830 1,933 1,975 2,169 1,607 1,128 1,410 849 733 420 Note: Data prior to 2002 not available. Source: City Records (Does not include Enterprise, Special Assessment bonds and CFD bonds) 158 Table 17 City of Goodyear Direct and Overlapping Governmental Activities Debt As of June 30, 2011 (Unaudited) Governmental Unit Debt repaid with property taxes and special assessment liens Overlapping Debt: Maricopa County Maricopa County Community College District Avondale Elementary School District #44 Liberty Elementary School District #25 Litchfield Elementary School District #79 Agua Fria Union High School District #216 Buckeye Union High School District #201 Centerra Community Facilities District Cortina Community Facilities District Cottonflower Community Facilities District Estrella Mountain Ranch Community Facilities District Goodyear Community Facilities Utilities District #1 Goodyear Community Facilities General District #1 Palm Valley Community Facilities District #3 Wildflower Ranch Community Facilities General District #1 Wildflower Ranch Community Facilities General District #2 Subtotal of overlapping debt Direct Debt: City of Goodyear Secondary Assessed Valuation $ 49,662,543,618 49,662,543,618 500,052,984 282,255,404 782,205,291 1,282,258,275 915,497,793 14,667,214 10,849,319 9,913,873 76,781,994 319,823,541 152,360,941 55,597,503 6,179,510 6,161,271 $ 103,739,692,149 848,758,886 Debt Outstanding $ Estimated Percentage Applicable (a) 653,040,000 33,050,000 7,875,000 35,705,000 52,485,000 56,960,000 3,510,000 2,455,000 2,745,000 17,055,000 50,640,000 12,425,000 8,015,000 1,035,000 1,220,000 $938,215,000 1.7000% 1.7000% 78.1200% 48.1600% 36.8200% 51.6200% 15.5100% 100.0000% 100.0000% 100.0000% 100.0000% 100.0000% 100.0000% 100.0000% 100.0000% 100.0000% 129,940,000 100.0000% Estimated Share of Overlapping Debt $ 11,101,680 25,818,660 3,792,600 13,146,581 27,092,757 8,834,496 3,510,000 2,455,000 2,745,000 17,055,000 50,640,000 12,425,000 8,015,000 1,035,000 1,220,000 $188,886,774 129,940,000 (a) Proportion applicable to the City of Goodyear, Arizona is computed on the ratio of secondary assessed valuation for 2011-2012. Sources: Maricopa County Department of Finance, Maricopa County Assessor's Office and Official Statements Note: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the city. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City of Goodyear. This process recognizes that when considering the government's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government. The percentage of overlapping debt applicable is estimated using taxable assessed property values. Applicable percentages were estimated by determining the portion of the county's taxable assessed value that is within the government's boundaries and dividing it by the county's total taxable assessed value. 159 Table 18 City of Goodyear Legal Debt Margin Information Last Six Fiscal Years (Unaudited) Fiscal Year 2011 2010 $ 848,758,886 $ 982,856,423 20% Limitation Debt Limit Equal to 20% of Assessed Valuation 169,751,777 196,571,285 200,144,210 Total Debt Applicable to 20% Limit 122,205,000 126,070,000 123,830,000 Secondary Assessed Value 2009 2008 2007 2006 $ 494,913,013 $ 391,377,371 152,847,428 98,982,603 78,275,474 129,540,000 90,195,000 47,795,000 $ 1,000,721,049 $ 764,237,138 Legal 20% Debt Margin (Available Borrowing Capacity) $ Total net debt applicable to the limit as a percentage of debt limit 6% Limitation Debt Limit Equal to 6% of Assessed Valuation 47,546,777 $ 71.99% $ Total Debt Applicable to 6% Limit 50,925,533 70,501,285 $ 64.13% $ 58,971,385 $ 61.87% $ 285,000 275,000 76,314,210 60,043,263 23,307,428 $ 84.75% $ 295,000 45,854,228 8,787,603 $ 91.12% $ 305,000 29,694,781 30,480,474 61.06% $ - 23,482,642 8,475,000 Legal 6% Debt Margin (Available Borrowing Capacity) $ Total net debt applicable to the limit as a percentage of debt limit 50,650,533 0.54% $ 58,686,385 0.48% $ 59,748,263 0.49% $ 45,549,228 0.67% $ 29,694,781 0.00% $ 15,007,642 36.09% Note: Data prior to 2006 is not available. Sources: Maricopa County Treasurer's Office City financial records and reports 160 Table 19 City of Goodyear Pledged-Revenue Coverage Last Six Fiscal Years (Unaudited) Public Improvement Corporation Municipal Facilities Revenue Bonds* Fiscal Year Ended June 30 Operating Revenue 2011 2010 2009 2008 $ 57,697,609 57,363,961 62,281,214 85,680,828 Pledged Revenue $ Debt Service Principal Interest 45,594,775 45,810,806 49,324,646 56,440,267 $ 745,000 720,000 680,000 505,000 $ 5,562,612 5,594,412 4,907,984 2,019,691 Coverage 7.23 7.25 8.83 22.36 Water & Sewer Bonds & Loans Fiscal Year Ended June 30 Operating Revenue 2011 2010 2009 2008 2007 2006 $ 18,271,778 16,378,677 15,300,056 15,151,775 13,760,462 10,816,571 Note: Less: Operating Expenses $ 8,965,363 8,350,588 9,733,836 11,424,111 11,008,102 9,629,632 Net Operating Revenue $ 9,306,415 8,028,089 5,566,220 3,727,664 2,752,360 1,186,939 Debt Service Principal Interest $ 1,167,815 1,195,691 877,292 656,612 640,500 502,118 $ 1,802,534 543,662 540,523 474,992 506,104 516,469 Coverage 3.13 4.62 3.93 3.29 2.40 1.17 Data prior to 2006 is not available. * PIC 2007 Bonds issued in FY2008 & PIC 2008 Bonds issued in FY2009 Source: City Financial Records and Reports 161 Table 20 City of Goodyear Demographic and Economic Statistics Last Six Fiscal Years (Unaudited) Fiscal Year 2011 2010* 2009 2008 2007 2006 Population 66,564 65,275 62,554 58,462 55,775 49,714 Personal Income (in thousands) $ 2,129,116 1,796,433 1,771,217 1,536,966 1,507,375 1,274,269 Per Capita Personal Income $ 31,986 27,521 28,315 26,290 27,026 25,632 Median Age 33.5 35.5 39.1 36.1 36.3 35.7 Education Level in Years of Schooling 13 to 16 13 to 16 13 to 16 13 to 16 13 to 16 13 to 16 Unemployment Rate 6.4% 6.6% 5.8% 3.0% 2.3% 2.3% Note: Data prior to 2006 is not available. Source: City Financial Records and Reports *Obtained from 2010 Census 162 Table 21 City of Goodyear Principal Employers1 Current Fiscal Year and Eight Years Ago (Unaudited) Major Corporation Fiscal Year Fiscal Year 2011 2003 Percentage of Total City Employment* Employees Percentage of Total City Rank Employment* Employees Rank Arizona State Prison/Perryville 956 1 3.19% Lockheed Martin 870 2 2.90% 0.00% West Valley Hospital 670 3 2.23% 0.00% Macy's 532 4 1.77% 0.00% City of Goodyear 511 5 1.70% 200 8 1.52% McLane Sunwest 374 6 1.25% 450 2 3.42% Amazon.com 357 7 1.19% 0.00% Wal-Mart Supercenter 340 8 1.13% 0.00% Cancer Treatment Centers of America 325 9 1.08% 0.00% Sub-Zero / Wolf 284 10 0.95% 0.00% 825 1 6.28% Newell Rubbermaid, Inc. 0.00% 250 5 1.90% Timco Aviation Services 0.00% 430 3 3.27% Cavco Industries, Inc. 0.00% 400 4 3.04% Fry's Food and Drug Store 0.00% 225 6 1.71% Aviation Management Systems 0.00% 220 7 1.67% Target 0.00% 175 9 1.33% Lufthansa-German Airlines 0.00% 170 10 1.29% 17.41% 3,345 Total 5,219 25.44% Note: This schedule should be current and nine years ago, but the earliest information available is FY 2003. 1 Source: City Records *2011 labor force = 29,984; 2003 labor force = 13,147 163 164 Table 22 City of Goodyear Full-time Equivalent City Government Employees by Function Last Six Fiscal Years (Unaudited) 2010 2011 Function . General Government Financial Services Information Services Police Officers Civilians Planning and Development Fire Firefighters and Officers Civilians Human Resources Community Services Economic Development Municipal Services Public Works Water Wastewater Sanitation Total 2009 2008 2007 2006 52 30 13 53 30 13 47 30 15 52 28 12 52 27 11 41 21 9 94 29 9 97 29 10 97 30 16 89 26 38 72 24 32 72 18 21 87 24 7 0 7 8 78 22 17 9 90 22 8 0 7 10 79 23 18 9 91 22 10 0 4 14 87 24 19 9 93 17 10 11 5 14 64 30 18 12 70 12 9 12 3 11 52 30 14 13 65 12 9 8 3 9 49 30 14 10 486 498 515 519 444 391 Note: Data prior to 2006 is not available. Source: City Financial Records and Reports 165 Table 23 City of Goodyear Operating Indicators by Function Last Six Fiscal Years (Unaudited) Function General Government City Clerk's Office # of records requests City Prosecutor's Office Charges filed/charges adjudicated (resolved) City Manager's Office % of survey respondents rating "Your Neighborhood as a Place to Live" as good to excellent Communications & Public Information News releases/media updates Traffic construction alerts Total newsletter pages sent to citizens Web pages created/updated Number of visits to website Number of web pages viewed Number of graphics/photography projects completed Police # Total arrests # Moving violations citations Fire # Emergency responses # Fire extinguished # Inspections Financial Services # accounts payable checks issued # purchase orders # water meters read annually Information Services # documents requests for service (Help Desk tickets) # of SPAM emails blocked from being delivered to the staff # of emails received Planning and Development Customer wait-time (in minutes) at One Stop Shop Total Number of Permits Issued Provide applicant with pre-application meeting within 30 days of submitting request % of inspections performed within 24 hours of request Human Resources # of new hires (FT & PT) HR operating cost as a % of City payroll 2011 2010 2009 2008 Fiscal Year 2007 2006 550 504 613 648 576 180 3,380 3,395 2,494 2,469 3,653 2,692 90% 90% 94% 94% 94% 91% 150 349 144 4,215 703,174 2,104,553 230 235 253 176 4,825 715,285 2,208,180 217 161 1,135 186 5,721 738,949 2,346,423 200 182 462 136 5,788 1,509,717 7,203,478 200 129 215 116 4,296 1,322,259 4,865,081 175 92 267 42 2,520 840,757 5,318,311 140 2,254 12,581 4,731 11,810 2,829 13,313 2,614 11,452 2,814 12,422 2,603 12,175 6,597 235 3,229 5,570 226 4,262 5,328 270 3,953 3,431 143 3,427 3,236 154 2,403 1,960 150 759 6,413 1,344 170,657 8,024 1,147 168,647 10,184 918 163,444 9,949 1,043 155,805 9,305 1,002 147,241 9,014 1,067 125,382 4,108 5,126,114 6,102,710 3,637 11,948,508 12,857,998 5,045 15,370,086 16,327,382 6,052 5,214,519 6,008,336 4,000 3,587,184 4,264,236 3,477 878,595 1,246,386 <3 3,269 <3 4,232 <5 3,401 <5 5,874 <5 1,340 <5 7,859 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 125 4.11% 247 4.18% 158 4.11% 179 4.36% 164 5.50% 174 5.26% continued 166 Table 23 City of Goodyear Operating Indicators by Function Last Six Fiscal Years (Unaudited) Function Parks and Recreation # attending Park & Recreation facilities and Libraries annually # of square feet of medians and rights of way maintained * Economic Vitality Sales Tax growth (% annual change) Bed Tax growth (% annual change) Municipal Services # of homes serviced by Residential Refuse Collection # of citizens serviced by Household Hazardous Waste collection program Water Service Water Service Connections Drinking Water Supplied (million gallons per day) Reclaimed Water Supplied (million gallons per day) Wastewater Sewer Service Connections Sewage Treated (millions gallons per day) Other Public Works Street resurfacing (miles) Potholes repaired Citizen & Neighborhood Resources # of new Code Enforcement cases processed per year 2011 54,428 22,696,736 Fiscal Year 2007 2010 2009 2008 52,241 22,175,027 51,844 22,118,000 49,111 15,320,000 50,093 15,320,000 4.42% -7.31% -10.40% -3.90% -12.30% -15% -10.25% 6% 21,489 20,928 20,149 19,811 18,664 17,228 634 510 531 729 848 - 21% 7% 2006 Table 23 46,330 15,320,000 70% 23% 14,588 11.40 0.37 14,488 11.10 0.23 13,975 11.00 0.45 13,500 10.80 0.27 13,051 6.86 0.09 11,597 6.95 0.09 16,743 3.73 16,144 3.73 16,144 3.70 13,500 3.24 11,398 2.48 5,037 2.29 12.5 260 372 4 681 783 34 1,096 32.7 977 2,016 2,255 2,155 2,698 2,755 2,092 Note: Data prior to 2006 is not available. *Change in value is not available for fiscal years 2007 & 2008 Source: City Financial Records and Reports concluded 167 Table 24 City of Goodyear Capital Asset Statistics by Function Last Six Fiscal Years (Unaudited) Fiscal Year Function Public Safety Police: Stations Police Vehicles Fire Stations Highways and Streets Street (miles) Streetlights Traffic signals Culture and Recreation Parks Parks Acreage Swimming Pools Tennis Courts Community Centers Water Water Mains (miles) Fire Hydrants Storage capacity (thousands of gallons) Wastewater Sanitary Sewers (miles) Storm Sewers (miles) Treatment capacity (MGD) (thousands of gallons) 2011 2010 2009 2008 2007 2006 3 130 6 3 124 6 3 130 6 3 125 6 4 146 4 1 107 4 704 8,438 72 704 8,329 72 563 7,969 67 450 7,391 56 360 7,391 37 360 7,391 30 17 204 1 6 1 17 204 1 6 1 16 184 1 6 1 16 156 1 6 1 12 117 1 6 1 11 82 1 2 1 310 2,791 16 310 2,791 16 307 2,754 16 286 2,481 15 257 2,370 11 173 2,053 12 229 57 5.6 223 54 5.6 225 58 5.6 236 80 5.5 152 105 4.6 167 105 11.6 Note: Data prior to 2006 is not available. Source: City Financial Records and Reports 168 Single Audit Section 169 170 REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS The Honorable Mayor and Council City of Goodyear, Arizona We have audited the financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of City of Goodyear (the City), Arizona as of and for the year ended June 30, 2011, which collectively comprise the City’s basic financial statements and have issued our report thereon dated November 15, 2011. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Internal Control Over Financial Reporting In planning and performing our audit, we considered the City’s internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control over financial reporting. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies, or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above. Tempe 2055 E. Warner Road Suite 101 Tempe, AZ 85284-3487 (480) 839-4900 Fax (480) 839-1749 Scottsdale 7098 E. Cochise Road Suite 100 Scottsdale, AZ 85253-4517 (480) 483-1170 Fax (480) 483-7126 Casa Grande 1115 E. Cottonwood Lane Suite 100 Casa Grande, AZ 85122-2950 (520) 836-8201 Fax (520) 426-9432 w w w . h e n r y a n d h o r n e . c o m Compliance and Other Matters As part of obtaining reasonable assurance about whether the City’s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. This report is intended solely for the information and use of management, City Council, others within the entity, and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. Casa Grande, Arizona November 15, 2011 INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 The Honorable Mayor and Council City of Goodyear, Arizona Compliance We have audited the compliance of the City of Goodyear (the City), Arizona with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to each of its major federal programs for the year ended June 30, 2011. The City’s major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major federal programs is the responsibility of the City’s management. Our responsibility is to express an opinion on the City’s compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the City’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination of the City’s compliance with those requirements. In our opinion, the City complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2011. However, the results of our auditing procedures disclosed no instances of noncompliance with those requirements, which are required to be reported in accordance with OMB Circular A-133. Tempe 2055 E. Warner Road Suite 101 Tempe, AZ 85284-3487 (480) 839-4900 Fax (480) 839-1749 Scottsdale 7098 E. Cochise Road Suite 100 Scottsdale, AZ 85253-4517 (480) 483-1170 Fax (480) 483-7126 Casa Grande 1115 E. Cottonwood Lane Suite 100 Casa Grande, AZ 85122-2950 (520) 836-8201 Fax (520) 426-9432 w w w . h e n r y a n d h o r n e . c o m Internal Control Over Compliance Management of the City of Goodyear, Arizona is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts, and grants applicable to federal programs. In planning and performing our audit, we considered the City’s internal control over compliance with the requirements that could have a direct and material effect on a major federal program to determine the auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be deficiencies, significant deficiencies, or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. This report is intended solely for the information and use of management, City Council, others within the entity, and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. Casa Grande, Arizona November 15, 2011 175 CITY OF GOODYEAR SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Year Ended June 30, 2011 Federal Grant CFDA Number Number Expenditures HOME Grant UC0914 14.239 $ HOME Grant UC1014 14.239 1,274 Community Development Block Grant DG0902 14.218 291,476 U.S. Department of Housing and Urban Development: Passed through Maricopa County Department of Housing: 123,442 Total U.S. Department of Housing and Urban Development 416,192 U.S. Department of Justice: Passed through Governor's Office for Childeren, Youth & Families: STOP Calendar 2010 ST-WSG-09-9365-05Y2 16.588 10,570 STOP Calendar 2011 ST-WSG-09-9365-05Y3 16.588 15,960 2009-BVP 16.607 3,647 2010-DJ-BX-1160 16.738 15,562 C4209015300 16.738 14,229 Passed through The Bureau of Justice Assistance: Bullet Proof Vest Partnership Edward Byrne Memorial Grant Program Passed through The Bureau of Justice Assistance: Use of Force Simulation Training Grant Passed through Maricopa County: iRecord Custodial Interview Initiative Edward Byrne Memorial Grant Subtotal 29,791 Passed through Maricopa County: ARRA MCNNET Grant C-50-10-021-3-01 16.803 74,472 ARRA MCNNET OT Grant C-50-10-024-3-01 16.804 8,049 Total U.S. Department of Justice 142,489 U.S. Department of Transportation: Passed through Arizona Department of Transportation: ARRA Yuma Road Bridge SS 544 03D/01C 20.205 3,820 CIOT Enforcement 2011-OT-033 20.600 4,667 West Valley DUI Task Force Enf OT 2011-410-006 20.601 33,030 2009-NG-008 20.614 10,492 Park and Ride Grant AZ-90-X070-00 20.507 135,061 * Park and Ride Grant AZ-95-X003-00 20.507 168,011 * ARRA Park and Ride Grant AZ-66-X001-00 20.507 1,047,382 * ARRA Park and Ride Grant AZ-96-X002 20.507 1,527,518 * Park and Ride Grant AZ-95-X006 20.507 2,219,317 * Passed through Arizona Governor's Office of Highway Safety: Highway Safety Cluster Highway Safety Cluster Subtotal CIOT Next Generation Maricopa County 37,697 Passed through City of Phoenix Total U.S. Department of Transportation 5,149,298 176 U.S. Department of Energy: ARRA Energy Efficiency and Conservation Block Grant DE-SC0002957 81.128 Total U.S. Department of Energy 190,948 190,948 U.S. Department of the Education: Passed through Governor's Office of Economic Recovery: AZAFIS System Grant OER-11-IGA-GS-62 84.397 Total U.S. Department of the Education 24,529 24,529 U.S. Department of Homeland Security Passed through Arizona Division of Emergency Management: CBRNE Response Team Sustainment/Enhancer 555810-01 97.067 46,400 CBRNE Response Team Sustainment/Enhancer 777811-02 97.067 82,832 Urban Area Assessment TLO Sustainment 777811-01 97.067 Total Department of Homeland Security Total Expenditures of Federal Awards 2,104 131,336 $ 6,054,792 *Denotes major program 177 CITY OF GOODYEAR, ARIZONA NOTE TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Year Ended June 30, 2011 NOTE 1 BASIS OF ACCOUNTING The accompanying Schedule of Expenditures of Federal Awards includes the federal grant activity of the City of Goodyear, Arizona and is presented on the modified accrual basis of accounting. The information in this schedule is presented in accordance with requirements of OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the financial statements. 178 CITY OF GOODYEAR, ARIZONA SCHEDULE OF FINDINGS AND QUESTIONED COSTS Year Ended June 30, 2011 SECTION I – SUMMARY OF AUDITORS’ RESULTS Financial Statements Type of auditors’ report issued: Internal control over financial reporting: • Material weakness(es) identified? • Significant deficiency(ies) identified that are not considered to be a material weakness(es)? reported Unqualified ____ yes __X_ no __ _ yes __X_ none Noncompliance material to financial statements noted? yes __X_ no Federal Awards Internal control over major programs: • Material weakness(es) identified? • Significant deficiency(ies) indentified that are not considered to be a material weakness(es)? reported ____ yes __X_ no __ _ yes __X_ none Type of auditors’ report issued on compliance for each major program listed below: Unqualified Any audit findings disclosed that are required to be reported in accordance with section 510(a) of OMB Circular A-133? ____ yes __X_ no Identification of major programs: CFDA Numbers 20.507 Name of Federal Program or Cluster Department of Transportation Park & Ride Grant Dollar threshold used to distinguish between Type A and Type B programs: $300,000 Auditee qualified as low-risk auditee? __X_ yes _____ no 179 CITY OF GOODYEAR, ARIZONA SCHEDULE OF FINDINGS AND QUESTIONED COSTS Year Ended June 30, 2011 SECTION II – FINDINGS RELATED TO FINANCIAL STATEMENTS REPORTED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS None Noted SECTION III – FINDINGS AND QUESTIONED COSTS RELATED TO FEDERAL AWARDS None Noted SECTION IV – PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS There were no prior year findings. 180